🏠 HRA Calculator India
Find your exact HRA exemption for income tax — metro and non-metro cities.
How HRA Exemption Works
House Rent Allowance (HRA) is a component of salary that employers pay to help employees cover rental accommodation costs. Under the old tax regime, a portion of HRA is exempt from income tax under Section 10(13A) of the Income Tax Act. The exempt amount is the minimum of three components:
- Actual HRA received from employer in the year
- 50% of Basic Salary (if you live in Mumbai, Delhi, Kolkata or Chennai) or 40% for all other cities
- Rent paid minus 10% of Basic Salary (if negative, this component = zero)
All three components are calculated on an annual basis. The smallest value is your HRA exemption. The remaining HRA (if any) is fully taxable as part of your salary.
Worked Example
Ravi lives in Bengaluru (non-metro). Monthly Basic: ₹60,000. HRA received: ₹25,000/month. Rent paid: ₹20,000/month.
Component 1: ₹3,00,000 (actual HRA)
Component 2: 40% × ₹7,20,000 = ₹2,88,000
Component 3: ₹2,40,000 − 10% × ₹7,20,000 = ₹2,40,000 − ₹72,000 = ₹1,68,000
HRA Exemption = Minimum (₹3,00,000 ; ₹2,88,000 ; ₹1,68,000) = ₹1,68,000
Taxable HRA = ₹3,00,000 − ₹1,68,000 = ₹1,32,000
HRA in New vs Old Tax Regime
Old Regime: HRA exemption is available. Claim it by providing rent receipts and landlord PAN (if annual rent exceeds ₹1 lakh) to your employer. The exempt amount is deducted from taxable income.
New Regime: HRA exemption is not available. The entire HRA received is taxable. If you pay high rent and receive significant HRA, this could make the old regime more beneficial — use the income tax calculator to compare both regimes for your specific situation.
Related Tools
- Income Tax Calculator India 2026-27 — compare old vs new regime with your HRA
- GST Calculator — calculate GST on rental and other expenses
- Net Worth Calculator — track your complete financial picture
Frequently Asked Questions
What are the metro cities for HRA exemption?
Only four cities qualify as metro for HRA purposes: Mumbai, Delhi (NCR), Kolkata and Chennai. All other cities — including Bengaluru, Hyderabad, Pune, Ahmedabad, Noida, Gurugram — are classified as non-metro and get 40% of basic salary instead of 50%. This is a common point of confusion since Bengaluru and Hyderabad are economically major cities but are non-metro under the HRA rules.
Can I claim HRA if I live in my own house?
No. HRA exemption is available only if you actually pay rent. If you own the house you live in, HRA received is fully taxable. You cannot claim HRA exemption while also claiming home loan interest deduction on the same property you live in (the home loan benefit is through Section 24(b) and is separate).
Can I claim HRA if I pay rent to my parents?
Yes, provided the arrangement is genuine. You must pay actual rent to your parents (bank transfer recommended), they must own the property, and they must declare it as rental income in their own tax return. The rent should be reasonable for the property and area. This is a legal tax-saving strategy that many salaried individuals use.
What documents do I need to claim HRA?
Submit rent receipts to your employer (monthly receipts are standard practice). If annual rent exceeds ₹1 lakh (₹8,333/month), you must also provide your landlord's PAN. Your employer will deduct HRA from taxable income based on the documents submitted before calculating TDS.
What if I don't get HRA as part of my salary?
If HRA is not part of your salary structure but you pay rent, you can still claim deduction under Section 80GG (up to ₹60,000 per year or 25% of total income or rent paid minus 10% of income — whichever is least). Section 80GG is available in the old regime only and cannot be claimed if your employer gives HRA.
Is HRA calculation based on basic salary or CTC?
HRA exemption is calculated on Basic Salary only — not CTC or gross salary. CTC includes employer PF, gratuity funding and other components. The basic salary figure is the "basic" line in your payslip and is typically 40–50% of gross salary in private sector jobs.
Can I claim both HRA and home loan deduction?
Yes, in certain situations. If your home loan property is in a different city from where you work and pay rent — for example, you own a flat in Pune but work and rent in Mumbai — you can claim both HRA exemption on the Mumbai rent and home loan interest deduction (Section 24b) on the Pune property. If you own and live in the same property, only home loan benefits apply, not HRA.
How do I claim HRA when filing my ITR?
If your employer has correctly deducted the HRA exemption and reflected it in Form 16, it will automatically appear in your ITR pre-filled data. If your employer did not fully account for it, you can manually enter the exemption in Schedule S (Salary) of your ITR form. Keep rent receipts and landlord PAN details ready for potential scrutiny.
Is GST applicable on residential rent?
Residential rent paid by individuals for personal use is exempt from GST. However, if a GST-registered business rents a residential property for use as accommodation for its employees or for business purposes, GST at 18% is payable under Reverse Charge Mechanism (RCM) by the registered business (not the landlord). This rule applies from July 2022 onwards.
Should I choose old or new regime if I have high HRA?
This depends on the total value of all your deductions in the old regime versus the simplified slabs in the new regime. A general guideline: if your HRA exemption alone exceeds ₹1.5–2 lakh, combined with Section 80C and home loan interest, the old regime may save more tax. Use the income tax calculator with both regimes to get an exact comparison for your numbers.