HRA Exemption Calculator — How Much HRA is Tax-Free?
Calculate your House Rent Allowance exemption using the correct three-condition formula. Old tax regime only — HRA exemption is not available in the new regime.
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🏙️ Important — Correct Metro Cities: Under the Income Tax Act, metro cities = Delhi, Mumbai, Chennai, Kolkata ONLY. Bangalore, Pune, Hyderabad, Ahmedabad are NOT metros for HRA purposes, even though they are large cities. Using the wrong city type is a common error.
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HRA Exemption Breakdown (Annual)
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📌 Remember: If rent paid exceeds ₹1 lakh per year (₹8,333/month), your landlord's PAN is mandatory to claim HRA exemption.
Frequently Asked Questions
HRA exemption = minimum of: (1) Actual HRA received, (2) 50% of basic salary (metro) or 40% (non-metro), and (3) Rent paid minus 10% of basic salary. HRA exemption is the lowest of these three values.
No. Under the Income Tax Act, only Delhi, Mumbai, Chennai, and Kolkata are metros. Bangalore, Pune, Hyderabad, Ahmedabad are non-metros for HRA purposes — even though they are large economic cities. This means the 40% cap applies, not 50%.
No. HRA exemption is only available under the old tax regime. If you opt for the new tax regime, you cannot claim HRA exemption regardless of how much rent you pay or HRA you receive.
Yes! You can pay rent to parents and claim HRA, provided: (1) You have a proper rent agreement, (2) You pay rent via bank transfer, and (3) Your parents declare the rental income in their ITR. This is legal and commonly used tax planning.