HRA Exemption Calculator
How much of your HRA is tax-free — using the rules for tax year 2026-27.
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Metro — 50% of basic + DA (tax year 2026-27)
Rent changed during the year?
Tax-free HRA for the year
₹1,56,000
Taxable HRA ₹84,000 a year (₹7,000 a month) · old regime, tax year 2026-27 rules
The three amounts — the lowest is exempt
Actual HRA received
HRA for the 12 months you paid rent
₹2,40,000
Rent paid − 10% of basic + DA (lowest — this is your exemption)
₹2,16,000 rent − ₹60,000
₹1,56,000
50% of basic + DA
Bengaluru is a metro for HRA in tax year 2026-27
₹3,00,000
- Exempt HRA / month
- ₹13,000
- Exempt HRA / year
- ₹1,56,000
- Taxable HRA / month
- ₹7,000
- Taxable HRA / year
- ₹84,000
- Exempt HRA₹1,56,000 (65%)
- Taxable HRA₹84,000 (35%)
Rent for the full exemption
Rent of ₹25,000 a month would make the full ₹2,40,000 exempt for 12 months — ₹84,000 more than now. You pay ₹18,000 a month.
That is the lower of your HRA and 50% of basic + DA, plus 10% of basic + DA. Above it, extra rent doesn’t add to the exemption.
Bengaluru became a metro from tax year 2026-27, but with these numbers the 40%/50% limit isn’t the lowest amount, so the exemption is the same in both years.
Good to know
- New regime: HRA is fully taxable. This exemption only helps if you choose the old regime. Compare old vs new regime
- Landlord’s PAN: if your rent is more than ₹1,00,000 a year, give your employer your landlord’s PAN along with the rent receipts. Your rent is ₹2,16,000 this year, so you’ll need it.
- No HRA in your salary? Self-employed people and employees without an HRA component can claim a separate rent deduction in the old regime (old section 80GG): the least of a fixed monthly limit (₹5,000 a month under the old Act), 25% of total income, and rent minus 10% of total income.
How HRA exemption is calculated
Under the old regime, the part of your house rent allowance that is tax-free is the lowest of three amounts:
- the HRA you actually received;
- the rent you paid minus 10% of your salary;
- 50% of your salary if you live in a metro city, or 40% anywhere else.
“Salary” here is only basic pay plus dearness allowance (and commission fixed as a percentage of turnover) — not your gross pay. Whatever HRA is left over is added to your taxable salary.
Example: basic ₹50,000 a month, HRA ₹20,000, rent ₹18,000, living in Bengaluru. For the year: actual HRA ₹2,40,000; rent ₹2,16,000 − ₹60,000 = ₹1,56,000; and the city limit is ₹3,00,000 (50%) under tax year 2026-27 rules, or ₹2,40,000 (40%) for FY 2025-26. The rent test is lowest either way, so ₹1,56,000 is exempt and ₹84,000 is taxable in both years. Raising the rent to ₹25,000 a month would make the whole ₹2,40,000 tax-free.
Where the new metro list does change things: basic ₹50,000, HRA ₹25,000 and rent ₹30,000 a month in Bengaluru. The rent test and the actual HRA are both ₹3,00,000, so the city limit decides. For FY 2025-26 it was 40% (₹2,40,000 exempt); from tax year 2026-27 it is 50%, so ₹3,00,000 is exempt — ₹60,000 more tax-free, worth ₹18,720 a year if you are in the 30% slab (with cess).
Which cities are metros for HRA from tax year 2026-27?
The Income-tax Rules, 2026, which apply from 1 April 2026, list eight: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Before that only the first four counted. If you are filing a return for FY 2025-26, switch the calculator to “FY 2025-26” to use the old list.
Rent for part of the year, or rent that changed
The exemption only covers the months you actually paid rent, so if you moved into a rented flat in August or bought a home, set the number of months. HRA for the other months is fully taxable. If your rent changed — a new lease or a move — the three amounts are worked out separately for each stretch with the same rent and then added, which is how most employers do it.
HRA and the new regime
The new regime is the default and doesn’t allow the HRA exemption at all. It has lower rates and a ₹75,000 standard deduction instead, and is often cheaper unless your rent, home loan and 80C/80D deductions add up to a lot. Put your exempt HRA into the old vs new regime calculator to see which one leaves you with more.
Rules can change — confirm with Form 16, your employer or a CA before filing.
Frequently asked questions
Is Bengaluru a metro for HRA?
Yes, from tax year 2026-27 (1 April 2026 onwards). The Income-tax Rules, 2026 list eight metro cities for the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. For FY 2025-26 and earlier, only Delhi, Mumbai, Kolkata and Chennai counted, so Bengaluru used 40%.
Are Gurugram, Noida or Thane metros for HRA?
No. Only the eight cities named in the rules get the 50% limit. Gurugram, Noida, Ghaziabad, Navi Mumbai, Thane and other neighbouring cities use 40%, even though many people treat them as part of a metro area.
Can I claim HRA in the new tax regime?
No. In the new regime the whole HRA is added to your taxable salary. Whether the HRA exemption is worth more than the new regime’s lower rates depends on your other deductions — compare both with the income-tax calculator.
When do I need my landlord’s PAN?
When the rent you pay is more than ₹1,00,000 in the year. Give your employer the landlord’s PAN along with your rent receipts. Below that, rent receipts are usually enough.
What if I don’t get HRA but pay rent?
Then there is no HRA to exempt, but the old regime has a separate deduction for rent (old section 80GG) for people with no HRA in their pay, including the self-employed. It is the least of a fixed monthly limit, 25% of total income, and rent minus 10% of total income.