# HRA Exemption Calculator

> HRA exemption is the lowest of three amounts: the HRA you actually receive, rent paid minus 10% of salary (basic + DA), and 50% of salary in specified cities or 40% elsewhere. From FY 2026-27, the Income-tax Rules, 2026 extend the 50% limit to eight cities — Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. HRA exemption is available only under the old regime.

Interactive calculator: https://www.industax.com/calculators/hra

- **50% cities from FY 2026-27:** 8 incl. BLR, HYD, Pune
- **Other cities:** 40% of salary
- **Regime:** Old regime only

## The three limits

| Limit | Amount |
| --- | --- |
| A | Actual HRA received |
| B | Rent paid − 10% of salary (basic + DA) |
| C | 50% of salary (8 specified cities) or 40% (other places) |
| Exempt HRA | Lowest of A, B and C; the rest is taxable |

## 50% cities

- Up to FY 2025-26: Delhi, Mumbai, Kolkata, Chennai
- From FY 2026-27: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad

## Documents and conditions

- Rent receipts or a rent agreement
- Landlord's PAN if annual rent exceeds ₹1 lakh
- Rent paid to parents is allowed if genuine and they declare it as income
- Rent paid to a spouse is generally not accepted
- If you own a house in the same city and still rent, expect questions

## Worked example: employee in Hyderabad, FY 2026-27

1. Basic salary ₹9,00,000 a year; HRA received ₹3,60,000; rent paid ₹3,00,000.
2. A = ₹3,60,000. B = ₹3,00,000 − ₹90,000 = ₹2,10,000. C = 50% of ₹9,00,000 = ₹4,50,000.
3. Exempt HRA = lowest = ₹2,10,000; taxable HRA = ₹1,50,000.

**Result:** ₹2.1 lakh exempt — Hyderabad now qualifies for the 50% limit, though here limit B decides.

## FAQs

### Is HRA exempt in the new tax regime?

No. HRA exemption is available only in the old regime. In the new regime the whole HRA is taxable, though the lower slab rates may still mean less tax overall.

### Can I claim HRA without HRA in my salary?

Not as HRA. Self-employed people and employees without HRA can claim rent under Section 80GG in the old regime, capped at ₹5,000 a month, subject to conditions.

### Can I claim both HRA and home-loan interest?

Yes, if you live in rented accommodation and the house you own is in a different city or is let out, or you have a genuine reason for not living in it.

## Official sources

- incometaxindia.gov.in: https://www.incometaxindia.gov.in/

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Canonical page: https://www.industax.com/calculators/hra
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.