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About the HRA Exemption Calculator
House Rent Allowance is exempt from tax under Section 10(13A), but only up to the lowest of three limits: the HRA you actually received, the rent you paid less 10% of your basic salary, and 50% of basic for metro cities or 40% elsewhere.
The third limit is what catches most people — no matter how much rent you pay, the exemption cannot exceed half your basic salary in a metro. And the whole exemption is available only under the old tax regime.
The formula
Computed on an annual basis, or month by month if your salary or rent changed during the year.
Things worth knowing
Frequently asked questions
It is the least of three amounts: the HRA received, the rent paid minus 10% of basic salary, and 50% of basic in a metro or 40% elsewhere. Whichever is smallest is exempt; the balance is taxed.
No. The HRA exemption is available only under the old regime. This is often the single biggest factor pushing renters in expensive cities toward the old regime.
Yes, provided the arrangement is real — you must actually transfer the rent, ideally by bank transfer, and your parents must declare it as rental income in their return. Ownership must be theirs, not yours.
Yes, for your employer to allow the exemption in your TDS computation, along with the landlord's PAN where annual rent exceeds ₹1 lakh. Keep the bank transfer trail too.
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