How to use the HRA calculator
Enter your monthly basic salary plus dearness allowance, the HRA your employer pays you, the rent you pay and your city. The calculator shows how much of your HRA is tax-free in a year and how much is added to your taxable income.
For example, with a basic salary of ₹50,000 a month, HRA of ₹20,000 and rent of ₹20,000 in a metro city, ₹1.8 lakh of your ₹2.4 lakh yearly HRA is tax-free. The limiting test is rent minus 10% of salary: ₹2.4 lakh − ₹60,000.
The HRA formula
The tax-free HRA is the lowest of:
- The HRA you actually receive
- Rent paid minus 10% of basic salary + DA
- 50% of basic salary + DA in the eight metro cities, 40% elsewhere
Everything above that amount is taxed as salary. The calculator works on yearly figures, the way your employer and Form 16 do.
What changed in 2026
From 1 April 2026, the Income-tax Rules made under the new Income-tax Act, 2025 count Bengaluru, Hyderabad, Pune and Ahmedabad as metro cities for HRA, alongside Delhi, Mumbai, Kolkata and Chennai. If you live in one of these four cities, your tax-free limit goes up from 40% to 50% of salary.
Tips to claim HRA
- HRA exemption is available only in the old tax regime; compare both regimes with the income tax calculator.
- Pay rent by bank transfer and keep a rent agreement and receipts.
- Give your employer your landlord's PAN if the rent is over ₹1 lakh a year.
- If you don't get HRA from your employer, you may be able to claim a smaller deduction for rent under a separate section in the old regime.
Frequently asked questions
How is HRA exemption calculated?
The tax-free part of HRA is the lowest of three amounts: the HRA you actually receive, the rent you pay minus 10% of your basic salary and DA, and 50% of basic salary and DA in the eight metro cities or 40% elsewhere.
Which cities get the 50% limit now?
From 1 April 2026, eight cities qualify: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. All other cities use 40%.
Can I claim HRA in the new tax regime?
No. HRA exemption is available only if you choose the old tax regime.
Do I need my landlord's PAN?
Yes, if the rent you pay is more than ₹1 lakh a year, you must give your employer your landlord's PAN. Keep rent receipts and the rent agreement as proof.
Can I claim HRA if I pay rent to my parents?
Yes, if you really pay rent and your parents own the house. They must show the rent as income in their tax return, and you should pay by bank transfer and keep a rent agreement.
Last reviewed: 13-10-2026. Rates and rules are checked against official sources; tell us if something has changed. Contact