Calculate your exact HRA exemption using the statutory min-of-three formula. Know how much of your House Rent Allowance is tax-free, how much is taxable, and what you can claim from your employer.
Enter 0 if not applicable
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Annual HRA Exemption (tax-free amount)
—Monthly Exempt HRA
—Monthly Taxable HRA
—Annual Exempt
—Annual Taxable
Min-of-Three Calculation (Monthly)
① Actual HRA Received—
② Rent Paid − 10% of (Basic+DA)—
③ 50%/40% of (Basic+DA)—
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How to Use This Calculator
1
Enter Basic and DA
Use your monthly Basic Salary. Add Dearness Allowance only if your employer includes DA in your salary structure — most private sector employees have zero DA.
2
Enter HRA received and rent paid
HRA received is from your payslip. Rent paid is what you actually pay each month — backed by rent receipts.
3
Select city type
Only Delhi, Mumbai, Kolkata and Chennai qualify as metro (50% rate). All other cities, including Bengaluru and Hyderabad, use the 40% non-metro rate.
4
Read your exempt and taxable HRA
The result shows your monthly and annual exempt HRA. Submit the exempt figure and supporting rent receipts to your employer to reduce your TDS.
💡Use the Rent Receipt Generator to create HRA-ready receipts your employer will accept — with landlord PAN and auto-generated receipt numbers.
House Rent Allowance (HRA) is a salary component provided by employers to cover employees' rental accommodation costs. It is not fully taxable — a portion is exempt from income tax under Section 10(13A) of the Income Tax Act, subject to a three-condition formula.
The exempt portion reduces your taxable income, directly lowering your TDS. For a salaried employee in Bengaluru paying ₹18,000/month rent with a Basic of ₹40,000 and HRA of ₹20,000, the annual exempt HRA can be over ₹1.5 lakh — a significant saving at the 20% or 30% tax slab.
Important: HRA exemption is only available under the old tax regime. If you have opted for the new regime (which is the default from FY 2024-25), your entire HRA is taxable. Compare both regimes using the Income Tax Calculator before deciding.
The Min-of-Three HRA Formula — Explained
HRA Exemption Formula
Exempt HRA = Minimum of: ① Actual HRA received from employer ② Rent paid − 10% of (Basic + DA) ③ 50% of (Basic + DA) for metro / 40% for non-metro
② Rent − 10% of Basic = ₹18,000 − ₹4,000 = ₹14,000
③ 40% of Basic (non-metro) = 0.40 × ₹40,000 = ₹16,000
Exempt HRA = MIN(₹20,000, ₹14,000, ₹16,000) = ₹14,000/month (₹1,68,000/year)
The taxable portion is HRA received minus exempt: ₹20,000 − ₹14,000 = ₹6,000/month = ₹72,000/year. This ₹72,000 gets added to your taxable salary income.
Metro vs Non-Metro — Why It Matters for HRA
The city classification directly affects Component ③ of the formula. Only four cities are classified as metro under the Income Tax rules: Delhi, Mumbai, Kolkata, and Chennai. All other cities use the 40% (non-metro) rate.
Basic Salary
Metro Limit (50%)
Non-Metro Limit (40%)
Difference
₹30,000/month
₹15,000
₹12,000
₹3,000/month
₹50,000/month
₹25,000
₹20,000
₹5,000/month
₹80,000/month
₹40,000
₹32,000
₹8,000/month
₹1,00,000/month
₹50,000
₹40,000
₹10,000/month
Note: Bengaluru, Hyderabad, Pune, Ahmedabad, and other major cities are non-metro for HRA purposes. Many employees in tech hubs assume metro status — this is a common error that can lead to wrongly inflated HRA exemption claims.
How to Claim HRA Exemption from Your Employer
Submit rent receipts: Provide monthly or quarterly receipts to your employer's HR/payroll during the proof-of-investment window (typically January–March each year).
Landlord PAN: If annual rent exceeds ₹1,00,000, provide your landlord's PAN. Without it, your employer cannot apply the full exemption.
Rent agreement: A notarised rent agreement strengthens your claim significantly, especially for amounts above ₹10,000/month.
If missed — claim in ITR: If you forgot to submit receipts to your employer and excess TDS was deducted, you can still claim the HRA exemption when filing your Income Tax Return and get a refund of the excess tax.
Use the Rent Receipt Generator on ToolLoom to create professional, HRA-compliant receipts for all months in seconds.
Frequently Asked Questions
HRA exemption is the minimum of three values: (1) Actual HRA received, (2) Rent paid minus 10% of Basic salary, (3) 50% of Basic for metro cities or 40% for non-metro. Whichever is lowest is your exempt HRA. The rest is taxable.
Only four cities: Delhi, Mumbai, Kolkata, and Chennai. All others — including Bengaluru, Hyderabad, Pune, Ahmedabad — are non-metro for HRA purposes and use the 40% rate instead of 50%.
Yes, provided the arrangement is genuine: use a proper rent agreement, pay via bank transfer, and ensure your parent declares the rent as taxable income in their ITR. The Income Tax Department scrutinises such claims closely.
No. HRA exemption under Section 10(13A) is not available under the new tax regime. If you opt for the new regime, your entire HRA component becomes taxable. The new regime has a lower standard deduction (₹75,000) but no HRA or 80C benefits.
If annual rent exceeds ₹1,00,000 (roughly ₹8,333/month), your landlord's PAN is mandatory for the employer to process your HRA claim. Without PAN, the landlord must provide a Form 60 declaration.
Most employers require monthly or quarterly rent receipts. Submit them during the proof-of-investment window (January–March). If not submitted to the employer, you can still claim HRA in your ITR at filing time.
You can only exempt based on actual rent paid. Component ② in the formula (Rent − 10% of Basic) caps the exemption to actual rent minus 10% of Basic. If rent is low, ② will be the minimum value, limiting your exemption.
Yes, under certain conditions. If you live in a rented house in one city while your owned property is in a different city, you can claim both. Both in the same city are possible if you can justify why you cannot stay in your own property.