HRA Exemption Calculator

Exact HRA tax exemption — all 3 formula parts shown

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HRA Exemption Calculator is a free, browser-based tool that lets you exact hra tax exemption — all 3 formula parts shown — with zero signup, zero installation. Your data never leaves your browser. Part of 138+ free developer and business tools at wowhow.cloud, built and maintained by a team with 14+ years of hands-on development experience.

TOOLHRA Exemption Calculator

Basic Salary (monthly)

Rs 50,000/mo

HRA Received (monthly)

Rent Paid (monthly)

City Type

Metro (2026): Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad, Ahmedabad

HRA Exemption Formula

1. Actual HRA receivedRs 20,000

2. Rent paid - 10% of BasicRs 13,000

MINIMUM — This is your HRA exemption

3. 50% of Basic SalaryRs 25,000

Your HRA Breakdown

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 is only available under the Old Tax Regime. Under the New Tax Regime, HRA is fully taxable.

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About HRA Exemption Calculator

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.

How It Works

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%.

Who Is This For

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.

How to Use

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

Frequently Asked Questions

HRA exemption under Section 10(13A) is the minimum of: (1) Actual HRA received, (2) Rent paid minus 10% of basic salary, (3) 50% of basic salary for metro cities or 40% for non-metro cities.

As per Union Budget 2025-26, metro cities for HRA now include: Delhi, Mumbai, Kolkata, Chennai (original four) plus Bengaluru, Pune, Hyderabad, and Ahmedabad (newly added).

No, HRA exemption under Section 10(13A) is only available under the Old Tax Regime. Under the New Tax Regime, HRA is fully taxable.

If rent paid is less than 10% of basic salary, the second formula component becomes negative (or zero), making your HRA exemption zero. You need to pay rent above 10% of basic to claim any exemption.

No. HRA exemption under Section 10(13A) requires you to actually pay rent to a landlord. If you live in a self-owned property, no HRA exemption is available. However, you can claim home loan interest deduction under Section 24(b) instead — both benefits cannot apply to the same property.

Yes, rent paid to parents is allowed for HRA purposes, provided: (1) the parent legally owns the property, (2) rent is actually transferred (bank or UPI), and (3) the parent declares the rent as income in their own ITR. A formal rental agreement between you and your parent strengthens the claim.

HRA exemption is calculated month-by-month, not on annual average. If your basic increases from April, the 10% threshold and 50/40% limits change from that month. Calculate the exemption separately for each pay period and sum them for the annual claim amount.