Rules reviewed 9 November 2026. EPF wage ceiling now ₹25,000 a month, from 17 September 2026.
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HRA exemption calculator

Find the tax-free part of your house rent allowance, using the three-way test.

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DA counts only if it forms part of your pay for retirement benefits.
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Metro cities: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad. From 1 April 2026 (Income-tax Rules, 2026): these use 50% of basic; all other cities use 40%.
Assumptions. HRA exemption is available only in the old tax regime, and only if you pay rent. The exempt part is the lowest of the HRA you receive, rent paid less 10% of basic salary, and 50% (listed cities) or 40% (others) of basic salary. The eight-city list is reported from the Income-tax Rules, 2026; we have not read the rule text itself. Rules last reviewed 9 November 2026. See how we calculate for sources.

How HRA exemption is worked out

Three amounts are compared each month, and the smallest one is exempt from tax. The rest of your HRA is added to your taxable salary.

  1. The HRA your employer actually pays you.
  2. Rent you pay minus 10% of your basic salary (with DA if it counts for retirement benefits).
  3. A share of basic salary: 50% in the listed cities, 40% elsewhere.

Documents you may need

Employers usually ask for rent receipts, and for the landlord's PAN when yearly rent is above ₹1 lakh. If you pay rent to a parent, the parent must report it as income.

Frequently asked questions

Can I claim HRA in the new tax regime?

No. HRA exemption is available only if you stay in the old regime. Use the old vs new regime calculator to see whether the old regime still wins for you.

Which cities get the 50% limit?

The cities listed in the form: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad. Until 31 March 2026 only Mumbai, Delhi, Kolkata and Chennai had the 50% limit.

What if I do not pay rent?

If you live in your own house or do not pay rent, no HRA exemption can be claimed and the whole HRA is taxable.

Does the exemption change if I change jobs mid-year?

The calculation is done month by month, so work it out for each period and each city separately.

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