- Exempt
- Taxable
- HRA exempt from tax
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- HRA that stays taxable
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- Rule 1 — actual HRA received
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- Rule 2 — rent paid minus 10% of salary
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- Rule 3 — 50%/40% of salary
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Figures are estimates for planning only, not investment or tax advice.
House rent allowance is only partly exempt from tax. The exempt amount is the smallest of three figures, and this calculator computes all three so you can see which one is binding.
The three rules
The exemption is the least of: the actual HRA received; rent paid minus 10% of salary; and 50% of salary in a metro or 40% elsewhere. “Salary” here means basic plus dearness allowance. For most people the second rule is the binding one.
What counts as a metro
Only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limit. Bengaluru, Hyderabad, Pune and every other city are treated as non-metro at 40%, however expensive their rents.
Documentation
Rent receipts are required, and your landlord’s PAN if annual rent exceeds ₹1 lakh. Rent paid to a parent is allowed provided they own the property and declare the income. HRA exemption is not available in the new tax regime.
Frequently asked questions
Can I claim HRA and a home loan together?
Yes, if you genuinely rent where you work and own a property elsewhere, or your own home is let out.
What if my employer pays no HRA?
Section 80GG allows a limited deduction for rent instead, capped at ₹60,000 a year.
Is HRA available in the new regime?
No. It is one of the exemptions given up in exchange for the lower slab rates.