City Type
Metro: Delhi, Mumbai, Chennai, Kolkata
₹
₹1,00,000
₹50,00,000
₹
₹0
₹20,00,000
₹
₹0
₹30,00,000
₹
₹0
₹50,00,000
HRA Exemption (Tax-Free)
₹2,40,000
₹20,000/month
HRA Received
₹2,40,000
Exempt
₹2,40,000
Taxable HRA
₹0
Exemption is minimum of:
① Actual HRA received
₹2,40,000
② 50%/40% of (Basic + DA)
₹3,00,000
③ Rent paid − 10% of (Basic + DA)
₹2,40,000
Minimum (exempt amount)
₹2,40,000
Estimated tax saved:
If you're in the 30% tax bracket, this exemption saves you approximately
₹74,880 in tax
(including 4% cess).
HRA exemption calculation is based on the Income Tax Act. Consult a tax professional for your specific situation. The calculations shown are for illustrative purposes only and should not be considered as financial advice.
Calculate your HRA tax exemption under Section 10(13A). Adjust the values to see how much of your HRA is tax-free.
How HRA Exemption is Calculated
The tax-exempt portion of your HRA is the minimum of these three:
- Actual HRA received from your employer.
- 50% of basic salary if you live in a metro city (Delhi, Mumbai, Chennai, Kolkata), or 40% for non-metro cities.
- Rent paid minus 10% of basic salary.
The rest of your HRA is added to your taxable income.
Example
If your basic salary is ₹50,000/month, HRA is ₹20,000/month, and you pay ₹18,000/month rent in Bangalore (non-metro):
- Actual HRA = ₹20,000
- 40% of basic = ₹20,000
- Rent - 10% of basic = ₹18,000 - ₹5,000 = ₹13,000
Minimum = ₹13,000/month is tax-exempt. The remaining ₹7,000/month is taxable.
Important Notes
- HRA exemption is only available under the old tax regime. The new tax regime does not allow HRA deductions.
- You need rent receipts as proof. For rent above ₹1 lakh/year, you also need your landlord’s PAN.