HRA Exemption Calculator
Calculate how much of your HRA is tax-free. Based on actual HRA, basic salary, and rent paid.
Metro cities (50% of basic): Delhi, Mumbai, Kolkata, Chennai. All other cities are non-metro (40% of basic).
HRA Received (Annual)
₹3.00 L
Tax-Free HRA
₹1.80 L
Taxable HRA
₹1.20 L
HRA Exemption = Minimum of these 3 components
About the HRA Exemption Calculator
HRA (House Rent Allowance) exemption is one of the biggest legal tax breaks available to salaried Indians. If you live in a rented home and your employer provides HRA, a portion of it is tax-free. For a person in Mumbai paying ₹25,000/month rent with a ₹15L salary, this exemption can save ₹60,000-₹80,000 in annual tax. The calculation uses the minimum of three conditions - and most employees do not know which one applies to them.
HRA Exemption - Minimum of Three
(1) Actual HRA received · (2) 50% of Basic for metros, 40% for non-metros · (3) Rent paid minus 10% of Basic salary
Metro cities: Delhi, Mumbai, Kolkata, Chennai · Non-metro: all other cities get 40% cap · Basic salary = typically 40-50% of CTC · Taxable HRA = Actual HRA - Exempt HRA
Worked Example
Mumbai employee, Basic ₹50,000/month, HRA ₹25,000/month, Rent paid ₹22,000/month
Exempt HRA = Min(₹25,000, ₹25,000, ₹17,000) = ₹17,000/month · Annual exemption = ₹2.04L · Tax saving (30% bracket) ≈ ₹63,000/year
Tips & Insights
- 1
Collect rent receipts every month - your employer and the tax department can ask for them.
- 2
If annual rent exceeds ₹1 lakh, you must provide your landlord's PAN to your employer.
- 3
You can claim HRA and home loan deduction together if the property is in a different city from where you work.
- 4
HRA is only available under the old tax regime - compare both regimes before deciding.
- 5
Paying rent to parents is legal and tax-compliant, provided they show it as rental income on their returns.
- 6
Negotiate a higher HRA component in your CTC structure - it is more tax-efficient than special allowance.
Why this matters for you
For salaried employees in metros paying ₹20,000-₹40,000/month rent, HRA exemption is often the single largest tax deduction available - sometimes more valuable than the full ₹1.5L under 80C. Yet many employees do not submit rent receipts on time or do not know which regime lets them claim it. Understanding HRA is immediate, actionable tax money back in your pocket.
Related Calculators
Salary
Calculate your monthly in-hand salary from CTC after PF, professional tax, and income tax deductions.
Tax Calculator
Calculate income tax under old and new regime for FY 2025-26.
EMI Calculator
Calculate your Equated Monthly Instalment for home, car, or personal loans.