— Tax, VAT & Sales
HRA Calculator
Calculate India HRA exemption when you pay rent. Enter basic salary, HRA received, rent paid, and city type to see the exempt amount, taxable HRA, and estimated tax saved.
HRA exemption
₹180,000
- Taxable HRA
- ₹120,000
- Tax saved (at 30% slab)
- ₹56,160
- ① Actual HRA received
- ₹300,000
- ② Rent − 10% of salary ✓ lowest
- ₹180,000
- ③ 50% of salary
- ₹300,000
— How it works
HRA exemption = least of: (1) actual HRA received; (2) rent paid − 10% of salary; (3) 50% of salary in a metro, 40% elsewhere. Salary = basic + dearness allowance. Taxable HRA = HRA received − exemption.
The least of three
HRA exemption is not simply your whole allowance — it is capped at the smallest of three amounts, so the rule rewards actually paying rent that is high relative to your salary. The three are: the HRA you receive; the rent you pay minus 10% of your salary; and 50% of salary if you live in a metro (Delhi, Mumbai, Kolkata, Chennai) or 40% if you do not. Whichever is lowest is your exemption, and the rest of your HRA is taxable. The calculator shows all three and marks the binding one, so you can see exactly what is limiting your exemption — often it is “rent − 10% of salary”, which is why low rent relative to pay caps the benefit.
Worked example — basic ₹6,00,000, HRA ₹3,00,000, rent ₹2,40,000, metro: ① HRA received = ₹3,00,000; ② rent − 10% of salary = ₹2,40,000 − ₹60,000 = ₹1,80,000; ③ 50% of salary = ₹3,00,000. The least is ₹1,80,000 — so that is exempt, ₹1,20,000 of HRA is taxable, and at the 30% slab you save about ₹56,160 (incl. cess).
Salary here means basic + DA
“Salary” for HRA is a specific figure: your basic pay plus dearness allowance (where the DA counts toward retirement benefits) — not your full cost-to-company. That matters because the 10%-of-salary and 50/40%-of-salary tests both hinge on it; using your whole CTC would understate the exemption. Enter basic and DA separately and the calculator combines them correctly. The metro/non-metro split is also strict: only the four metros get 50%, and your actual city of residence (not your office) determines it.
Old regime only — and the documents you need
The HRA exemption is available only under the old tax regime. The new (default) regime offers lower slab rates but drops most exemptions and deductions, HRA included — so claiming HRA only helps if you have opted for the old regime, and the saving has to be weighed against the old regime’s higher rates. If you do claim it, keep rent receipts, and if annual rent exceeds ₹1,00,000 you must report the landlord’s PAN. The tax saved shown here is an estimate at the slab you select, including the 4% health and education cess; your actual saving depends on your total income and regime choice.
— Reader questions
How is HRA exemption calculated?
It is the least of three: the actual HRA received; the rent you pay minus 10% of your salary (basic + DA); and 50% of salary for metro cities or 40% for non-metro. The smallest of these is exempt; the rest of your HRA is taxable.
What counts as salary for HRA?
Basic salary plus dearness allowance (the part counting toward retirement benefits) — not your full CTC or gross. Both the 10% and 50/40% tests are based on this figure.
Which cities count as metro for HRA?
Only Delhi, Mumbai, Kolkata and Chennai. Residents there can claim up to 50% of salary; everywhere else the limit is 40%. It is based on where you rent, not where you work.
Can I claim HRA under the new tax regime?
No. The HRA exemption is available only under the old regime. The new regime has lower slab rates but removes HRA and most other exemptions, so claiming HRA only helps if you have chosen the old regime.
How much tax does HRA save me?
The exempt amount is multiplied by your marginal slab rate (plus 4% cess). On a ₹1,80,000 exemption at the 30% slab, that is about ₹56,160 saved. Select your slab to estimate it for your income.