How is HRA exemption calculated?

HRA exemption is the minimum of three amounts: (1) Actual HRA received from employer, (2) Rent paid minus 10% of basic salary, and (3) 50% of basic salary for metro cities or 40% for non-metro cities. The lowest of these three is the exempt amount.

Which cities are considered metro for HRA purposes?

For HRA exemption under Section 10(13A), metro cities are Mumbai, Delhi, Kolkata, and Chennai. All other cities including Bangalore, Hyderabad, Pune, and Ahmedabad are treated as non-metro, allowing only 40% of basic salary as HRA exemption.

Is HRA available under the new tax regime?

No. HRA exemption under Section 10(13A) is only available under the old tax regime. Under the new tax regime, the entire HRA received is taxable. If you pay high rent, you may want to compare both regimes to see which saves more.

HRA Exemption Calculator

How much of your HRA is actually tax-free?

Calculate your exact HRA exemption under Section 10(13A). Enter your basic salary, HRA received, and rent paid. Metro and non-metro cities supported.

Section 10(13A)Metro and Non-MetroOld Regime OnlyFree, no login

Your HRA Details

Input Period

Basic Salary (per month)

₹

HRA Received (per month)

₹

Actual Rent Paid (per month)

₹

City Type

Metro: Mumbai, Delhi, Kolkata, Chennai only

Annual HRA Exemption

Monthly: --

Tax Saving

Enter details to calculate

HRA Received (Annual)

Exempt Amount

Taxable HRA

How the Exemption is Calculated (Minimum of 3 Rules)

Actual HRA Received

The HRA your employer pays you annually

Rent Paid Minus 10% of Basic

Actual rent paid annually minus 10% of annual basic salary

50% of Basic Salary (Metro)

50% of annual basic for metro cities (Mumbai, Delhi, Kolkata, Chennai)

HRA Split: Exempt vs Taxable

Tax Exempt

-- of HRA received

Taxable

-- of HRA received

⚠️HRA exemption is only available under the Old Tax Regime. Under the new regime, your entire HRA of --/year is fully taxable.

How HRA Exemption Works

Section 10(13A) of the Income Tax Act allows salaried employees to claim HRA exemption on the rent they pay. The exempt amount is the minimum of three calculated values -- not all three, just the lowest one.

HRA Exemption = Minimum of these three

1. Actual HRA received from employer

2. Rent paid annually − 10% of annual basic salary

3. 50% of annual basic salary (metro) or 40% (non-metro)

= Exempt amount (whichever is lowest)

Metro vs Non-Metro: What's the Difference

The city classification only affects Rule 3 of the HRA calculation. Metro cities get 50% of basic salary as the ceiling; non-metro cities get 40%.

City	Classification	Rule 3 Limit
Mumbai, Delhi, Kolkata, Chennai	Metro	50% of basic salary
Bangalore, Hyderabad, Pune, Ahmedabad	Non-Metro	40% of basic salary
All other cities	Non-Metro	40% of basic salary

Bangalore and Hyderabad are not classified as metro for HRA purposes despite being major cities. This is a common point of confusion -- use 40% if you live there.

HRA Exemption Example

Monthly basic: Rs. 40,000 | Monthly HRA received: Rs. 20,000 | Monthly rent paid: Rs. 25,000 | City: Metro

Rule	Calculation	Annual Amount
1. Actual HRA received	Rs. 20,000 x 12	Rs. 2,40,000
2. Rent minus 10% of basic	(Rs. 25,000 - Rs. 4,000) x 12	Rs. 2,52,000
3. 50% of basic (metro)	Rs. 20,000 x 12	Rs. 2,40,000
Exempt amount (minimum)		Rs. 2,40,000

Frequently Asked Questions

No. HRA exemption under Section 10(13A) is only available under the old tax regime. If you opt for the new regime, your entire HRA is added to taxable income. For employees paying high rent, this can make the old regime significantly better.

Your exemption is still capped at the minimum of the three rules. Paying more rent than your HRA helps Rule 2 (rent minus 10% of basic) but the actual HRA received (Rule 1) often becomes the binding constraint. You cannot claim more than what you received as HRA.

Yes. You need rent receipts to claim HRA from your employer for TDS purposes. If your annual rent exceeds Rs. 1 lakh (Rs. 8,333/month), you also need the landlord's PAN. Without PAN, your employer may not accept the HRA claim.

Yes, if you genuinely pay rent to your parents and they declare it as rental income in their ITR. The arrangement must be legitimate -- the money should actually transfer to their account and they should file it as income. This is a legal and commonly used strategy.

Yes, but only if your home is in a different city from where you work. You can claim HRA for the rented accommodation where you live and home loan interest (Section 24B) for the property you own elsewhere. Both cannot be claimed for the same property or city under normal circumstances.