HRA Exemption Rules (2026)
- •HRA exemption is available only under the old tax regime (Section 10(13A)).
- •Metro cities (Delhi, Mumbai, Kolkata, Chennai) use 50% of basic; others use 40%.
- •Exemption = least of: actual HRA, the 50%/40% figure, or rent paid minus 10% of basic.
- •Landlord PAN required if annual rent exceeds ₹1 lakh.
The Real Problem This Solves
Salaried renters routinely overpay tax because they never calculate their full HRA exemption, or wrongly assume their entire HRA is tax-free.
Only part of your HRA is exempt, decided by a three-way rule. This calculator finds the exact figure.
How HRA Exemption Is Decided
Your exemption is the lowest of three numbers: actual HRA received, 50% (metro) or 40% (non-metro) of basic salary, and rent paid minus 10% of basic.
Example: Sneha works in Mumbai with ₹6 lakh basic, ₹3 lakh HRA, and ₹2.4 lakh rent. The three figures are ₹3 lakh, ₹3 lakh, and ₹1.8 lakh. The lowest is ₹1.8 lakh, her tax-free HRA. The remaining ₹1.2 lakh is taxable.
| City | Basic / HRA / Rent | Exempt HRA |
|---|---|---|
| Metro | ₹6L / ₹3L / ₹2.4L | ₹1.8 lakh |
| Non-Metro | ₹6L / ₹3L / ₹2.4L | ₹1.8 lakh |
| Metro | ₹6L / ₹3L / ₹3.6L | ₹3 lakh (fully) |
Frequently Asked Questions
Can I claim HRA in the new tax regime?
No. HRA exemption under Section 10(13A) is available only if you opt for the old tax regime.
Which cities count as metro?
Only Delhi, Mumbai, Kolkata, and Chennai. They use 50% of basic; every other city uses 40%.
Related Calculators
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