HRA Calculator (HRA Exemption)

How to use this HRA calculator

1. Enter your basic salary plus DA for a month. Leave out HRA, special allowance and other allowances.
2. Enter the HRA you receive each month, from your salary slip.
3. Enter the rent you pay each month for the home you live in.
4. Pick the city where you rent. Eight cities get the 50% limit; everywhere else gets 40%.
5. Open "More options" to set your old-regime tax slab, which estimates the tax you save, and the number of months you paid rent if it was not the whole year.

The result shows your tax-free HRA for the year, the taxable part, which of the three limits decides it, and the monthly rent at which all of your HRA would be exempt.

How HRA exemption is worked out

House rent allowance is part of your salary, but under the old regime some or all of it is tax-free if you pay rent for the home you live in. The tax rules set three limits and the lowest of them is the amount you do not pay tax on. For this test, salary means basic pay plus dearness allowance where your terms of employment provide for it; other allowances and perquisites are left out.

HRA exemption for common salaries and rents

Monthly figures in, yearly results out, for rent paid all year in tax year 2026-27:

Rent is the limit that decides most results. Each extra ₹1,000 of monthly rent makes ₹12,000 more of your HRA tax-free for the year, until the rent reaches your HRA plus 10% of your salary. Beyond that point more rent saves no tax.

Eight cities now get the 50% limit

The Income-tax Rules, 2026 apply from 1 April 2026 and extend the 50% limit from four cities to eight: Mumbai, Kolkata, Delhi and Chennai, as before, plus Bengaluru, Hyderabad, Pune and Ahmedabad. Every other place, including nearby cities the rules do not name, stays at 40%. The city that counts is the one where your rented home is. For 2025-26 and earlier years, the old four-city list still applies.

The change matters when the salary limit is the lowest of the three. For ₹1,00,000 basic + DA, ₹50,000 HRA and ₹60,000 rent a month:

The higher limit makes another ₹1,20,000 tax-free and saves about ₹37,440 more tax in a year.

Does HRA make the old regime worth it?

The exemption is only half the question, because claiming it means giving up the new regime's lower slab rates, its ₹75,000 standard deduction and the rebate that makes taxable income up to ₹12 lakh tax-free. Here is the tax for 2026-27 for a resident under 60, where the old regime also counts ₹1.5 lakh of tax-saving investments and ₹25,000 of health insurance:

On a ₹13 lakh salary the new regime is cheaper even with a ₹1.8 lakh HRA exemption. The old regime only starts to win at higher salaries with large rents and other deductions: at ₹30 lakh, adding ₹50,000 of your own NPS contributions brings the old regime down to ₹4,68,000, ₹7,800 less than the new regime. Run your own figures before you tell your employer which regime you want.

Getting the most from your HRA

Three things decide how much of your allowance escapes tax. First, rent: until it reaches your HRA plus 10% of your salary, every rupee of rent adds to the exemption. Second, the salary limit: if your HRA is more than 50% (or 40%) of your basic + DA, part of it is always taxed, whatever rent you pay. Third, time: the limits cover only the months you rent, so HRA paid while you lived in your own home or with family rent-free is taxed in full. And from 2026-27, renting in Bengaluru, Hyderabad, Pune or Ahmedabad raises the salary limit by a quarter, from 40% to 50% of your salary.

Rules, documents and tax

• Old regime only. The new regime computes your income without the HRA exemption, so it only helps if the old regime works out cheaper overall.
• You must pay rent for a home you do not own. HRA is not exempt for a home you own, or for months when you paid no rent.
• Landlord's PAN above ₹1 lakh. If your rent for the tax year is more than ₹1 lakh, give your employer your landlord's name, address and PAN in Form 124, and declare any relationship with the landlord. Keep rent receipts and the agreement.
• What counts as salary. Basic pay plus DA where your terms of employment provide for it. HRA itself, special allowance and perquisites are left out, so a low basic means lower limits on both the rent test and the salary test.
• Rent paid to a relative. The conditions do not rule it out if you do not own the home, but Form 124 asks you to state the relationship, and the rent has to be genuinely paid.
• Part of the year. The limits are worked out only for the months you rented; HRA for other months is taxable.
• The tax saving is an estimate. The calculator multiplies the tax-free HRA by your slab rate and adds 4% cess. It ignores surcharge and the chance that the exemption moves part of your income into a lower slab.

To see whether the old regime is still worth it with your HRA exemption, enter the exempt amount in the income tax calculator. The in-hand salary calculator shows what reaches your bank account each month. If you are weighing renting against buying, the rent vs buy calculator compares the two, and the gratuity calculator works out what your basic pay earns you when you leave a job.

This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.