HRA Exemption Calculator

Work out how much of your House Rent Allowance is exempt from income tax under Section 10(13A): enter your basic salary plus DA, HRA received, rent paid, and city type.

Quick Facts

Formula
min(HRA received, rent − 10% of salary, 50%/40% of salary)
Salary here means basic pay plus DA; the exempt amount is whichever of the three is smallest.
City limit
50% (metro) or 40% (non-metro) of salary
Metro status applies to Delhi, Mumbai, Kolkata, and Chennai under current rules; all other cities use 40%.

Your Results

Calculated
HRA exemption (annual)
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Tax-exempt portion of HRA
Taxable HRA (annual)
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HRA received minus exemption
Binding condition
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Which of the three limits applied
Share of HRA exempt
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Exemption as % of HRA received

Ready

Enter salary, HRA received, rent paid, and city type, then press Calculate.

How the HRA Exemption Calculator works

House Rent Allowance (HRA) is a common salary component for employees in India who live in rented accommodation. Not all of the HRA an employer pays is taxable — Section 10(13A) of the Income Tax Act, read with Rule 2A, exempts a portion of it from income tax. This calculator applies that exact rule to your salary, HRA, and rent figures.

The formula

The exempt amount is the lowest of three figures:

  • Actual HRA received from your employer over the period.
  • Rent paid minus 10% of salary (basic pay plus dearness allowance, DA), floored at zero.
  • 50% of salary if you live in a metro city (Delhi, Mumbai, Kolkata, or Chennai), or 40% of salary for any other city.

Whichever of these three amounts is smallest becomes your tax-exempt HRA. The rest of the HRA you received is added to your taxable salary income.

Worked example

Take a basic salary plus DA of ₹600,000 per year, HRA received of ₹240,000 per year, rent paid of ₹300,000 per year, in a metro city. The three conditions are: (1) HRA received = ₹240,000; (2) rent minus 10% of salary = ₹300,000 − ₹60,000 = ₹240,000; (3) 50% of salary = ₹300,000. The lowest is ₹240,000, so the entire HRA received is exempt in this case and no HRA is taxable.

What moves the exemption most

  • Rent relative to salary: if rent paid is at or below 10% of salary, condition two is zero, and since exemption cannot be negative, the exemption is zero — the full HRA becomes taxable.
  • City classification: the 50%/40% ceiling only matters when it is the smallest of the three figures; a low HRA or low rent-based condition can make city type irrelevant to the final result.
  • HRA received itself: exemption can never exceed the HRA actually paid, no matter how high rent or the salary percentage run.

Assumptions and scope

This calculator assumes constant basic salary, DA, HRA, and rent across the period entered (typically a financial year) and applies the standard Rule 2A formula. It does not account for mid-year salary revisions, HRA claimed jointly by co-tenants, or the new tax regime (where HRA exemption is not available). For a year with changing salary or rent, the calculation should technically be done month-by-month and the monthly exemptions summed — use this tool per period if your figures changed during the year.

Frequently Asked Questions

How is HRA exemption calculated?
Under Section 10(13A) of the Income Tax Act (Rule 2A), the exempt portion of House Rent Allowance is the lowest of three amounts: (1) the actual HRA received from your employer, (2) rent paid minus 10% of salary (basic pay plus dearness allowance), and (3) 50% of salary if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai) or 40% of salary for a non-metro city. Whichever of the three figures is smallest becomes your tax-exempt HRA; the remainder is added to taxable income.
What counts as salary for the HRA calculation?
For this formula, salary means basic pay plus dearness allowance (DA) if it forms part of retirement benefits, for the same period as the rent and HRA figures. It excludes other allowances, bonuses, and perquisites. This calculator asks for basic salary plus DA directly as a single annual figure.
Why is the exemption sometimes zero?
If rent paid does not exceed 10% of salary, the second condition (rent minus 10% of salary) is zero or negative, and since exemption cannot be negative it is floored at zero — meaning the entire HRA received is taxable. This is common when rent is low relative to salary or when no rent is paid at all.
Does the metro city classification matter a lot?
It sets the ceiling in condition three (50% versus 40% of salary), but it only changes the result when that ceiling is the smallest of the three figures. If the HRA received or the rent-based condition is already lower than 40% of salary, the metro/non-metro distinction has no effect on the final exemption.

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