How to use this HRA calculator
House Rent Allowance can be one of the largest tax exemptions a salaried tenant claims, but the exempt amount is rarely the full HRA on your payslip. The Income Tax Act caps it using a three-way test that surprises many first-time filers.
This calculator applies that exact test — the least of actual HRA received, rent paid beyond 10% of salary, and a metro/non-metro percentage of salary — so you know how much of your HRA escapes tax and how much remains taxable.
The three-way exemption test
Your HRA exemption is the lowest of three figures: the actual HRA received, the rent you pay minus 10% of salary, and 50% of salary if you live in a metro or 40% if you do not.
Because it is the minimum of the three, paying very low rent or receiving very high HRA usually means a large part of your allowance stays taxable.
Metro versus non-metro
For HRA, only Delhi, Mumbai, Kolkata and Chennai count as metros and qualify for the 50% limit. Every other city, including Bengaluru, Hyderabad and Pune, uses the 40% limit.
Salary here means basic pay plus dearness allowance, not your gross — using gross salary by mistake inflates the exemption.
Old regime only
HRA exemption is available exclusively under the old tax regime. If you opt for the new regime, the entire allowance is taxable and this exemption does not apply.
The regime selector lets you see this difference directly, which is useful when deciding which regime to declare.
Keeping your claim valid
Retain rent receipts and a rent agreement, and report your landlord's PAN to your employer if annual rent crosses ₹1,00,000, as tax authorities can ask for proof.
If you pay rent to a family member, the arrangement must be genuine with actual payments to withstand scrutiny.