Tax calculator
How much of your HRA is tax-free
The exemption is the least of three separate figures, and the one people miss is that it is rent minus ten per cent of salary — not rent.
Basic salary for the year. Dearness allowance is added below if you receive it.
Leave at zero if you do not get DA. It counts as salary for this calculation, so it raises the exemption.
Metro means Delhi, Mumbai, Kolkata or Chennai only. Everywhere else — including Pune, Bengaluru and Hyderabad — uses the 40% rule, whatever the rents look like.
Exempt from tax
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Indicative only, based on the assumptions below. Not an offer or a guarantee.
What this assumes
- Salary means basic plus dearness allowance, not CTC and not gross pay.
- Metro means Delhi, Mumbai, Kolkata or Chennai. No other city qualifies, whatever its rents look like.
- A full year in the same accommodation on the same salary. If any of those changed mid-year the exemption is worked out for each period separately.
The boring bit
The subtraction that catches everybody
The exemption is the least of three figures, and two of them are easy: the HRA you received, and half your salary in a metro or 40% elsewhere. The third is where almost every wrong claim comes from — it is not the rent you paid, it is the rent you paid minus ten per cent of your salary.
That subtraction is why a well-paid person in modest accommodation often exempts far less than they expect, and occasionally nothing at all. If your rent is below a tenth of your salary, the third test produces zero and it does not matter how generous the other two are.
The rows on this page show all three figures rather than only the answer, deliberately. Seeing which one bound tells you the only useful thing: which lever would actually move it. If the place-based cap is binding, more rent changes nothing. If the rent test is binding, it changes a great deal.
One caveat that outranks all of the above: this is an old-regime exemption. The new regime is the default and does not allow it at all.
Exempt = least of (HRA received, rent − 10% of salary, 50% of salary in a metro or 40% elsewhere), where salary = basic + DA
FAQ
Questions about this calculator
Does this work under the new tax regime?
No. The HRA exemption is an old-regime benefit and the new regime is the default. If you are on the new regime this exemption does not apply at all — which is exactly the sort of thing worth checking before choosing, and the old-versus-new calculator on this site is the place to do it.
I pay rent to my parents. Does that count?
It can, if the arrangement is genuine — they must own the property, the rent must actually be paid, and they must declare it as income. Done properly it is legitimate. Done as a paper exercise it is the kind of claim that does not survive scrutiny.
What do I need to keep?
Rent receipts, and the landlord’s PAN if your annual rent exceeds ₹1,00,000. Without the PAN above that threshold the exemption is commonly disallowed, and it is the most avoidable reason a claim fails.
Why is my exemption so much less than my rent?
Almost always the second rule: only rent above ten per cent of your salary counts. If your salary is high relative to your rent, that subtraction removes most of it before the other two rules are even reached.
Turn the number into a plan
A calculator gets you to a figure. Getting there needs a product, and that is the part we do.