SEBI REGISTERED INVESTMENT ADVISER INA000022260
HRA
Calculate how much of your House Rent Allowance is exempt from tax and how much is taxable under the old tax regime.
Metro cities for this FY: Delhi, Mumbai, Kolkata, Chennai, Bangalore, Pune, Hyderabad, Ahmedabad.
The least of the above three is exempt from tax.
For education and planning illustration only. Not personalised tax advice. Actual exemption depends on Form 12BB proofs, rent agreements, and your chosen tax regime.
House Rent Allowance (HRA) helps salaried employees meet rented accommodation costs. The full HRA you receive is not always tax-free — only the least of three amounts is exempt under Section 10(13A).
HRA exemption is available only under the old tax regime. If you opt for the new regime, HRA is fully taxable.
Exempt HRA is the least of the following three:
Raghu receives ₹50,000 basic salary per month, pays ₹15,000 monthly rent, and gets ₹1 lakh HRA for the year.
| Head | Calculation | Amount (₹) |
|---|---|---|
| Actual HRA received | Given | 1,00,000 |
| Rent − 10% of salary | (15,000 × 12) − 10% of (50,000 × 12) | 1,20,000 |
| 50% of basic salary | 50% of (50,000 × 12) | 3,00,000 |
Yes, if you live with your parents and pay them rent. Your parents must own the house and declare the rent as income from house property in their tax returns.
You can still claim HRA while filing your income tax return. Adjust taxable salary for the exempt HRA and claim a refund if excess tax was deducted.
If annual rent exceeds ₹1 lakh, your landlord's PAN is mandatory to claim HRA exemption.
You can claim both HRA (for a rented home you live in) and home loan interest/principal deductions (for a different owned property), subject to the usual conditions.
Till FY 2025–26, metro cities for the 50% rule are Delhi, Mumbai, Kolkata, and Chennai.
From FY 2026–27 onwards, Bangalore, Pune, Hyderabad, and Ahmedabad are also treated as metros for HRA.
