HRA exemption calculator
Work out how much of your house rent allowance is tax-free, and what's holding it down. Shows all three HRA limits, with the eight metro cities for FY 2026-27. Free, with no sign-up.
Updated
April 2026 to March 2027, returns due July 2027
Metro means Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad.
From your salary slip. Add DA only if you get it.
The house rent allowance on your salary slip.
Need receipts? Make them with the rent receipt generator.
Less than 12 if you moved in or started the job partway through.
Tax-free HRA for FY 2026-27
₹1,80,000
₹15,000 a month. The other ₹1,20,000 of your HRA is taxed as salary.
The lowest of these three is tax-free
- HRA you received
- ₹3,00,000
- Rent minus 10% of basic Lowest
- ₹1,80,000
- 50% of basic (metro)
- ₹3,00,000
Your rent sets the limit. The first 10% of basic salary you pay in rent doesn't count, so all of your HRA would be tax-free only with rent of ₹30,000 a month or more.
In the old regime, that's worth about ₹56,160 less tax if your income is in the 30% slab, or ₹37,440 in the 20% slab, including cess.
- Only in the old tax regime. The new regime doesn't allow the HRA exemption.
- Your rent comes to more than ₹1 lakh for the year, so your employer will need your landlord's PAN.
Next steps
How the HRA exemption is worked out
Only part of your HRA is tax-free: the lowest of these three amounts.
- The HRA you actually received.
- The rent you paid, minus 10% of your basic salary.
- 50% of your basic salary if you live in a metro city, or 40% anywhere else.
“Basic salary” here means basic pay plus dearness allowance (DA) if it counts towards your retirement benefits, plus any commission fixed as a percentage of sales you make. Everything is worked out for the months you paid rent, and whatever's left of your HRA is taxed like the rest of your salary.
Example: what the new metro cities change
Say you live in Bengaluru, your basic salary is ₹40,000 a month, your HRA is ₹20,000 and you pay ₹25,000 in rent.
| Per month | FY 2025-26 | FY 2026-27 |
|---|---|---|
| HRA received | ₹20,000 | ₹20,000 |
| Rent minus 10% of basic | ₹21,000 | ₹21,000 |
| Share of basic | ₹16,000 (40%) | ₹20,000 (50%) |
| Tax-free HRA | ₹16,000 | ₹20,000 |
Bengaluru counts as a metro from FY 2026-27, so ₹48,000 more of this HRA is tax-free each year. In the 30% slab, that's about ₹15,000 less tax.
Metro cities for HRA
| Where you live | FY 2025-26 | FY 2026-27 |
|---|---|---|
| Delhi, Mumbai, Kolkata, Chennai | 50% | 50% |
| Bengaluru, Hyderabad, Pune, Ahmedabad | 40% | 50% |
| Everywhere else | 40% | 40% |
How to claim it
- Tell your employer you're choosing the old tax regime.
- Give them rent receipts for the year, and your landlord's PAN if the rent is more than ₹1 lakh a year. Employers usually ask for proofs between January and March. The rent receipt generator makes a receipt for every month in one PDF.
- Missed the deadline? Claim the exemption in your tax return instead, and keep the receipts in case you're asked for them.
Not sure the old regime is right for you? The income tax calculator compares both regimes with your HRA and other deductions. For documents and common problems, read how to claim HRA with rent receipts.
Questions
- How is the HRA exemption calculated?
- The tax-free part is the lowest of three amounts: the HRA you received, the rent you paid minus 10% of your basic salary, and 50% of your basic salary in a metro city or 40% elsewhere. It's worked out for the months you actually paid rent. The rest of your HRA is taxed as salary.
- Which cities count as metros for HRA?
- From FY 2026-27, eight cities get the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Everywhere else the limit is 40% of basic salary. For FY 2025-26 and earlier, only Delhi, Mumbai, Kolkata and Chennai count.
- Can I claim HRA in the new tax regime?
- No. The HRA exemption is only available in the old regime. If you've chosen the new regime, all of your HRA is taxed as salary, and rent receipts won't reduce your tax.
- Can I claim HRA if I pay rent to my parents?
- Generally yes, if they own the home, you really pay them, and they show the rent as income in their own tax return. Pay by bank transfer so there's a record. Paying rent to your spouse is best avoided, because the tax department often questions it.
- Do I need my landlord's PAN?
- Yes, if the rent you pay is more than ₹1,00,000 a year, which is about ₹8,334 a month. If your landlord doesn't have a PAN, ask your employer what they need instead, usually a signed declaration from the landlord.
- What if my salary doesn't include HRA?
- If you're self-employed or your salary has no HRA, you may be able to claim a deduction for rent under Section 80GG instead, in the old regime only. It has its own limits, including a cap of ₹5,000 a month, and you can't claim it if you own a home in the city where you live or work.
- I forgot to give my employer rent receipts. Can I still claim HRA?
- Yes. If you're on the old regime, claim the exemption when you file your income tax return, and you'll get any extra TDS back as a refund. Keep your rent receipts and proof of payment in case the tax department asks for them.
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