Numarly

HRA Exemption Calculator (India)

Find your tax-exempt House Rent Allowance under the old tax regime.

Enter monthly figures — the exemption is calculated on the same monthly basis.

City Type

What is it?

This calculator finds how much of your House Rent Allowance (HRA) is exempt from income tax under the old tax regime, based on the three-way rule defined by the Income Tax Act.

Formula

HRA Exemption = Minimum of:
1) Actual HRA received
2) Rent paid − 10% of basic salary
3) 50% (metro) or 40% (non-metro) of basic salary

Formula Explanation

The tax law takes the smallest of these three amounts as your exempt HRA — the rest of your HRA received is added back to your taxable income. This is why simply receiving a large HRA doesn't automatically mean a large tax benefit; it depends on your actual rent and basic salary too.

Example Calculation

With a ₹40,000 basic salary, ₹20,000 HRA, and ₹18,000 rent in a metro city: actual HRA is ₹20,000, rent minus 10% of basic is ₹14,000, and 50% of basic is ₹20,000. The exemption is the smallest — ₹14,000/month.

How to Use

  1. Enter your monthly basic salary.
  2. Enter your monthly HRA received from your employer.
  3. Enter your actual monthly rent paid.
  4. Select whether you live in a metro or non-metro city.

Benefits

  • Applies the exact three-way rule used by the Income Tax Department instead of a rough estimate.
  • Shows all three comparison values so you understand which one is limiting your exemption.
  • Helps you decide how much rent receipt or rent agreement documentation to prepare for tax filing.

Use Cases

  • Declaring HRA exemption to your employer during the tax declaration window.
  • Deciding whether the old tax regime is worthwhile based on your HRA benefit.
  • Understanding how a rent increase or salary hike changes your exempt HRA.

What Your Result Means

The exemption amount is subtracted from your taxable salary under the old regime. Any HRA received above the exemption is fully taxable, just like regular salary income.

Tips

  • Keep rent receipts and, if annual rent exceeds ₹1,00,000, your landlord's PAN — both are typically required to claim HRA exemption.
  • If you don't pay rent (e.g. living with parents without a rental agreement), you generally can't claim this exemption.
  • HRA exemption only applies under the old tax regime — the new regime doesn't allow this deduction.

Common Mistakes

  • Assuming the full HRA received is exempt — it's usually limited by the lowest of the three rule components.
  • Forgetting HRA exemption doesn't apply if you've opted into the new tax regime.
  • Not keeping rent receipts or a rental agreement, which are required as proof if the claim is scrutinized.

FAQs

Can I claim HRA exemption if I live with my parents?

Yes, if you pay rent to your parents and have a proper rental agreement and payment trail (e.g. bank transfers), you can generally claim the exemption on rent paid to them.

Does HRA exemption apply under the new tax regime?

No, HRA exemption is only available under the old tax regime — the new regime doesn't allow this or most other deductions.

What if I don't pay any rent?

If you don't pay rent, you generally cannot claim any HRA exemption, even if your salary includes an HRA component — the full HRA becomes taxable.

What documents do I need to claim this exemption?

Typically rent receipts and, for annual rent above ₹1,00,000, your landlord's PAN details are required by most employers and for tax filing.

This tool estimates HRA exemption under the old tax regime rules and is for informational purposes only — confirm details with your employer's payroll or a tax advisor.

Last updated: July 26, 2026