Rs 50,000/mo
Metro (2026): Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad, Ahmedabad
MINIMUM — This is your HRA exemption
Monthly HRA Exemption
Rs 13,000
Annual: Rs 1,56,000
Taxable HRA (monthly)
Rs 7,000
Annual: Rs 84,000
Tax Saving @ 20%
Rs 31,200
per year
Tax Saving @ 30%
Rs 46,800
per year
HRA exemption under Section 10(13A) of the Income Tax Act reduces your taxable salary by the actual tax-free HRA component — but the exempt amount is not simply the HRA you receive. It is the minimum of three formula values, and missing any one component can significantly understate or overstate your claim. With the 2025-26 budget expanding the metro city list to include Bengaluru, Pune, Hyderabad, and Ahmedabad, more employees now qualify for the higher 50% rate.
The HRA exemption formula uses three tests under Section 10(13A) and Rule 2A. The exempt amount is the minimum of: (1) actual HRA received from employer, (2) rent paid minus 10% of basic salary, and (3) 50% of basic salary if the employee works in a metro city, or 40% for non-metro cities.
The tool displays all three computed values side by side and highlights the binding minimum — the actual exempt amount. It then estimates annual tax savings at both 20% and 30% income tax brackets so you can see the rupee impact on your take-home.
Metro city determination uses the updated 2026 list: Delhi, Mumbai, Kolkata, Chennai (original four under the Act) plus Bengaluru, Pune, Hyderabad, and Ahmedabad as notified in Budget 2025-26. Employees in these eight cities use the 50% rate; all others use 40%.
A Bengaluru IT employee newly eligible for the 50% metro rate since the 2025-26 budget update, recalculating their optimal rent level to maximise exemption.
A Chennai-based salaried professional paying Rs 25,000/month rent checking exactly how much of their Rs 30,000 HRA is tax-free.
An employee moving from Nagpur (non-metro, 40%) to Hyderabad (metro, 50%) mid-year checking the impact on their pro-rated annual claim.
A high-earning professional in the 30% bracket estimating annual HRA tax savings before negotiating their next annual rent agreement.
Scope note: Uses the updated metro city list as per Budget 2025-26. HRA exemption is only applicable under the Old Tax Regime — not available under the New Tax Regime. The tool uses monthly basic salary as input; if your employer uses annual basic for the 10% threshold calculation, minor differences may arise. Always cross-check with your employer's payroll system before submitting investment declarations.
Disclaimer: This calculator is for informational and educational purposes only and does not constitute financial, tax, or legal advice. Results are estimates based on publicly available tax slabs and formulas. Consult a qualified Chartered Accountant, tax professional, or financial advisor for guidance specific to your situation. Built and maintained by the WOWHOW Team with 14+ years of software development experience.
Enter your monthly basic salary, HRA received, and rent paid
Select your city — Metro or Non-Metro (updated 2026 metro list)
View the three HRA formula amounts with the minimum highlighted
Check estimated tax savings at 20% and 30% brackets
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