Free Tax Tool

HRA Exemption Calculator

Calculate your House Rent Allowance tax exemption under Section 10(13A) of the Income Tax Act. Enter your salary, HRA, rent, and city — and see instantly how much HRA is tax-free under the old regime.

Payroll software for India PF & ESI Calculator

Basic + Dearness Allowance (monthly)₹60,000

HRA received (monthly)₹30,000

Rent paid (monthly)₹25,000

City of residence

Metro — exemption is lower of 50% of salary or actuals

Your income tax slab30%

Quick examples

PAN required for >₹1L annual rent

HRA Exemption

Least of three conditions under Section 10(13A)

1. Actual HRA received	₹30,000
2. 50% of (Basic + DA)	₹30,000
3. Rent − 10% of salaryLowest ✓	₹19,000

HRA exemption

₹19,000

per month · least of the three conditions above

Taxable HRA (per month)

₹11,000

Annual tax saved

₹68,400

Estimated at 30% income tax slab · old tax regime only

Your annual rent is ₹3,00,000(exceeds ₹1,00,000). You must provide your landlord's PAN to your employer when submitting HRA proof.

* This calculator estimates HRA exemption under the Old Tax Regime. The New Tax Regime does not allow HRA exemption. Actual exemption may vary based on your specific salary structure and applicable tax rules. Consult a CA for filing.

How HRA exemption works

Section 10(13A): the least of three rule

Under Section 10(13A) read with Rule 2A of the Income Tax Rules, the exempt portion of your HRA is the lowest of these three amounts:

Actual HRA

The HRA amount your employer actually pays you each month.

50% or 40% of salary

50% of (Basic + DA) for metro cities, 40% for non-metro cities.

Rent − 10% of salary

Actual rent paid minus 10% of your (Basic + DA).

Rules & limits

Key rules for claiming HRA exemption

Metro vs non-metro

Eight cities qualify for the 50% rule: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad & Ahmedabad. All others use 40%.

Salary definition

"Salary" means Basic Pay + Dearness Allowance (if part of retirement benefits) + commission at a fixed percentage of turnover.

Landlord PAN required

If your annual rent exceeds ₹1,00,000, you must provide your landlord's PAN to your employer for proof.

Old tax regime only

HRA exemption is available only under the Old Tax Regime. The New Tax Regime (Section 115BAC) does not allow HRA deduction.

Note: HRA exemption is only available under the Old Tax Regime. If you have opted for the New Tax Regime under Section 115BAC (with lower tax rates but fewer deductions), you cannot claim HRA exemption. The old regime requires filing Form 10IE to opt out of the new regime each year.

FAQ

HRA exemption frequently asked questions

What is HRA exemption under Section 10(13A)?

HRA exemption under Section 10(13A) allows salaried employees to deduct a portion of the House Rent Allowance they receive from their employer from their taxable income. The exemption is the least of three amounts: actual HRA received, 50%/40% of (basic salary + DA), or actual rent paid minus 10% of (basic salary + DA).

Which cities qualify for the 50% HRA exemption?

Eight cities qualify for the 50% HRA exemption: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad, and Ahmedabad. For all other cities in India, the exemption is calculated at 40% of (basic salary + DA).

Can I claim HRA if I live in my own house?

No, HRA exemption is only available if you are actually paying rent for a residential accommodation. If you live in your own house, you cannot claim HRA exemption even if your employer includes HRA in your salary structure.

Can I pay rent to my parents and claim HRA?

Yes, you can pay rent to your parents and claim HRA exemption, provided the payments are genuine, supported by a formal rental agreement, and your parents declare this rental income in their Income Tax Return. However, you generally cannot claim HRA for rent paid to your spouse.

Is HRA exemption available under the New Tax Regime?

No, HRA exemption is not available under the New Tax Regime (Section 115BAC). It is only available if you opt for the Old Tax Regime. If you choose the new regime with lower tax rates, you must forgo HRA exemption and most other deductions.

What documents do I need to claim HRA?

You need: (1) Rent receipts for the months you claim HRA, (2) A rental agreement with your landlord, (3) Landlord's PAN if annual rent exceeds ₹1,00,000, (4) A self-declaration if the landlord does not have a PAN. Your employer will typically ask for these at the start of the year or during declaration submission.

What salary components are included in the 50%/40% calculation?

For HRA calculation, 'salary' includes: Basic Pay, Dearness Allowance (if it is part of retirement benefits), and any commission calculated as a fixed percentage of turnover. It does not include other allowances, bonuses, or perquisites.

Can I claim HRA exemption if my landlord doesn't have a PAN?

Yes, but you will need a self-declaration from your landlord stating that they do not have a PAN. However, if your annual rent exceeds ₹1,00,000, providing the landlord's PAN is mandatory. In its absence, your employer may deduct TDS on the HRA amount at a higher rate.

What happens if my HRA is more than my rent?

If your HRA exceeds your rent, the exemption is still limited to the least of the three conditions. In most cases, the 'rent minus 10% of salary' condition will be the limiting factor if your HRA is large relative to your rent. The excess HRA becomes part of your taxable income.

How does SignHR help with HRA and payroll compliance?

SignHR automatically structures salary components including HRA based on your configured pay structures. It tracks rent declarations, computes HRA exemption for each employee during payroll runs, and generates compliance-ready inputs for TDS and Form 16 preparation.

Automate your payroll

Let SignHR handle salary structures, HRA & tax compliance

SignHR computes HRA, PF, ESI, PT, and TDS from your salary data automatically — and hands off cleanly to your payroll provider.

See it in action Payroll features

Official references

Income Tax India Income Tax Act, 1961 EPFO India