HRA Exemption Calculator
Calculate your exact HRA tax exemption under the old regime. Minimum of three conditions: actual HRA received, 50%/40% of basic salary, and actual rent minus 10% of basic. Instant result.
HRA Exemption Calculator
Minimum of 3 conditions — calculated instantly
Metro cities: Delhi, Mumbai, Chennai, Kolkata
HRA component from your salary slip (annual total)
Total rent actually paid during the year
HRA exemption is available under old tax regime only. Not applicable under new regime.
HRA exemption is calculated as the MINIMUM of three values: actual HRA received, 50% of basic (40% for non-metros), and actual rent paid minus 10% of basic salary. Most employees leave tax savings on the table by not optimising rent payments relative to their basic salary.
What is HRA Exemption?
House Rent Allowance (HRA) is a salary component that helps salaried employees reduce their tax burden when they live in rented accommodation. Under the old tax regime, a portion of the HRA received from the employer is exempt from income tax — you pay tax only on the remaining (taxable) portion.
How is HRA exemption calculated?
The exempt HRA is always the minimum of three conditions: the actual HRA received from your employer; 50% of your basic salary if you live in a metro city (Delhi, Mumbai, Chennai, Kolkata) or 40% if in a non-metro city; and the actual rent paid minus 10% of your annual basic salary. Whichever of these three amounts is lowest becomes your HRA exemption.
HRA exemption formula with example
Say your annual basic salary is Rs 6,00,000, your employer gives you Rs 3,00,000 HRA, and you pay Rs 20,000/month rent (Rs 2,40,000 per year) in Mumbai (metro). Condition 1 = Rs 3,00,000. Condition 2 = 50% × 6,00,000 = Rs 3,00,000. Condition 3 = Rs 2,40,000 − Rs 60,000 (10% of basic) = Rs 1,80,000. The minimum is Rs 1,80,000 — that is your exempt HRA. The remaining Rs 1,20,000 is taxable.
How to maximise your HRA exemption
Pay adequate rent: Condition 3 (rent minus 10% of basic) is the binding constraint for most people. If your rent is too low relative to your basic, you lose exemption. Increasing rent — within your budget — directly increases your exemption. Structure salary correctly: A higher HRA component in your CTC structure helps only if Condition 3 is met. Always ensure rent paid is at least 10% of basic + desired exemption amount. Maintain records: Keep rent receipts. If annual rent exceeds Rs 1 lakh, submit your landlord's PAN to your employer.
HRA and the new tax regime
HRA exemption is not available under the new tax regime. This is one of the primary reasons that salaried employees paying significant rent in metro cities often find the old tax regime more beneficial — especially when combined with 80C, home loan interest, and NPS deductions.