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HRA Calculator

House Rent Allowance exemption under §10(13A) (India)

By UtilityKit Team · Reviewed for accuracy by UtilityKit Editors · Updated May 2026

About HRA Calculator

House Rent Allowance (HRA) is the most-claimed salary exemption for Indian employees who pay rent — but only the smallest of three legally specified amounts is actually exempt under Section 10(13A) of the Income Tax Act, read with Rule 2A of the Income Tax Rules. This calculator applies the rule of three exactly: it shows the actual HRA received, the rent paid in excess of 10% of (Basic + DA), and 50% of (Basic + DA) for metro cities or 40% for non-metro, and reveals the exempt portion as the minimum of these three. The remaining HRA is added to taxable income. The metro list under §10(13A) is hard-coded by statute as Mumbai, Delhi, Kolkata and Chennai — Bangalore, Hyderabad and Pune are non-metros for HRA purposes regardless of cost of living. A toggle accepts either monthly or annual figures, so you can plug in whatever your salary slip shows.

Why use HRA Calculator

  • Statutorily Correct Rule of Three: §10(13A) read with Rule 2A specifies exactly three amounts; the minimum is exempt. Many online calculators omit the 'rent − 10% basic' floor or apply the wrong city percentage — this tool implements the rule verbatim with the metro list hard-coded.
  • Metro vs Non-Metro Honesty: Only Mumbai, Delhi, Kolkata and Chennai count as metros for HRA — not Bangalore, Hyderabad, Pune or Ahmedabad despite their cost of living. The dropdown reflects this statutory definition exactly, which prevents over-claiming and downstream notice from the AO.
  • Monthly or Annual Entry: Salary slips are monthly, Form 16 is annual. The unit toggle accepts either, removes the multiplication burden, and keeps the math consistent end-to-end.
  • Visible Rule-of-Three Breakdown: A table shows all three amounts side-by-side and highlights the binding minimum, so you see why your exemption is what it is — useful when an employer's payroll software computes a different number and you need to challenge it.
  • Old Regime Reminder: HRA exemption is unavailable under the new tax regime (default since FY 2023-24). The tool surfaces this fact prominently so you do not compute an exemption that you cannot actually claim on your chosen regime.
  • Rent Receipt and PAN Compliance Cue: The notes call out the ₹1,00,000-per-year rent threshold above which CBDT requires you to report the landlord's PAN to your employer — a common audit trigger if missed.

How to use HRA Calculator

  1. Choose whether you want to enter monthly figures (matching your salary slip) or annual figures (matching your Form 16 / ITR)
  2. Select your city type — Metro for Mumbai, Delhi, Kolkata, Chennai; Non-metro for everywhere else under the strict §10(13A) definition
  3. Enter your Basic salary plus Dearness Allowance (DA) component — exclude HRA, conveyance, special allowance and other components
  4. Enter the actual HRA received from your employer for the same period
  5. Enter the rent you actually pay to your landlord, including only the rent component (not maintenance or society charges)
  6. Read the exempt portion (the least of the three legal limits) and the taxable portion in the result cards
  7. Inspect the rule-of-three breakdown to see which of the three limits constrained your exemption

When to use HRA Calculator

  • When filing your Income Tax Return and computing the HRA exemption to claim under §10(13A) for the financial year
  • Before submitting Form 12BB to your employer in January with the year's investment and rent declarations
  • When deciding between the old tax regime and the new tax regime — large HRA usually swings the choice toward the old regime
  • When negotiating a salary structure with a new employer — increasing the HRA component can raise your net take-home if you live in a metro on rent
  • When moving from a metro to a non-metro mid-year and apportioning your HRA exemption between the two periods
  • When responding to a Section 143(1) intimation that disallowed the HRA exemption — to show the rule-of-three calculation explicitly

Examples

Salaried metro employee

Input: Annual figures, Metro, Basic+DA: ₹6,00,000, HRA received: ₹2,40,000, Rent paid: ₹3,00,000

Output: Exempt HRA ₹2,40,000 (least of three); Rent − 10%basic = ₹2,40,000 binds; Taxable HRA ₹0

Non-metro employee with low rent

Input: Annual figures, Non-metro, Basic+DA: ₹5,00,000, HRA received: ₹1,50,000, Rent paid: ₹1,00,000

Output: Exempt HRA ₹50,000 (rent − 10%basic binds); Taxable HRA ₹1,00,000

Monthly slip, basic-cap binds

Input: Monthly, Metro, Basic+DA: ₹50,000, HRA received: ₹30,000, Rent paid: ₹40,000

Output: Annualised: Basic ₹6L, HRA ₹3.6L, Rent ₹4.8L. Exempt ₹3,00,000 (50% of basic binds); Taxable HRA ₹60,000

Tips

  • Keep stamped rent receipts and your bank-transfer record for the rent for at least 7 years — the limitation period for income tax scrutiny
  • If annual rent exceeds ₹1,00,000, get your landlord's PAN. If they refuse, get a signed declaration with their address and Aadhaar instead and keep it on file
  • If your basic salary is low compared to your HRA, the 40%/50%-of-basic cap will bind. Negotiate a higher basic component if possible — it lifts both HRA exemption and EPF, NPS and gratuity
  • When paying rent to a parent, transfer rent by NEFT/UPI on a fixed date every month, get a signed receipt, and ensure the parent reports the income on their ITR. A messy arrangement collapses on first scrutiny
  • Do not claim HRA for the months you lived in a house you own. The exemption is meant only for periods you actually paid rent
  • Always run both old and new regime numbers through a tax calculator before opting in. If your HRA exemption plus 80C plus 80D plus 24(b) is over ₹3.5–4 lakh, the old regime usually wins

Frequently Asked Questions

What is the formula for HRA exemption under Section 10(13A)?▾
Exempt HRA is the LEAST of three amounts: (a) Actual HRA received; (b) Rent paid minus 10% of (Basic + DA); and (c) 50% of (Basic + DA) if you live in Mumbai, Delhi, Kolkata or Chennai, else 40%. The remainder of your HRA is taxable. This is mandated by Section 10(13A) of the Income Tax Act read with Rule 2A of the Income Tax Rules, 1962.
Which cities count as 'metro' for HRA?▾
Only four: Mumbai, Delhi, Kolkata and Chennai. Bangalore, Hyderabad, Pune, Ahmedabad, Surat, Jaipur and every other city — even Tier-1 ones — count as non-metro for the HRA exemption calculation under §10(13A) and get 40% of (Basic + DA) as the third limit, not 50%. This city list is hard-coded in the statute and has not been revised since the 1960s.
Can I claim HRA exemption under the new tax regime?▾
No. HRA exemption is unavailable under the new tax regime introduced under §115BAC, which is the default regime from FY 2023-24 onwards. To claim HRA you must opt for the old tax regime in your ITR, which forfeits the new-regime concessional slabs and the standard deduction in some cases. Compare both regimes' net tax before deciding.
Do I need to submit rent receipts to my employer?▾
Yes, if you want HRA exempted in your monthly TDS. The employer typically asks for stamped rent receipts at year-end; some require quarterly. If your annual rent exceeds ₹1,00,000 (~₹8,333 a month), Notification 8/2013 also mandates that you submit your landlord's PAN. Without these, the employer adds back the entire HRA to taxable income for TDS purposes — though you can still claim the exemption when filing your ITR if you have the receipts on hand.
Can I pay rent to my parents and claim HRA?▾
Yes — but only if it is a genuine arrangement. The property must be owned by your parent (not jointly by you), there must be a real lease or written rental agreement, you must actually transfer the rent (preferably by bank transfer for an audit trail), and the parent must declare the rental income on their own ITR. Sham arrangements where the rent loops back to you are routinely caught and disallowed by the AO.
Can I claim HRA and home loan interest on the same property?▾
Not on the same property. If you own a self-occupied house and live in it, HRA exemption cannot be claimed because you are not paying rent for that residence. However, you can claim HRA for a rented house in your work city while simultaneously claiming home loan interest deduction under §24(b) on a separate property in your home town — this is a legitimate and common scenario.
What if I live with my spouse and one of us pays the rent?▾
Whoever actually pays the rent claims the HRA exemption. If both spouses jointly pay rent on a shared lease, each can claim exemption proportionate to their share — but each spouse must have HRA in their salary, must show rent paid to the same landlord, and should ideally split via separate bank transfers to keep the trail clean.
Why is my taxable HRA non-zero even though my rent is much higher than HRA?▾
Two common reasons. First, the third limit — 50% or 40% of (Basic + DA) — caps the exemption regardless of how high the rent is. If your basic is low, this cap binds even on a luxury rental. Second, rent in the formula is only the amount in excess of 10% of (Basic + DA); the first 10% is treated as your contribution. Inspect the rule-of-three breakdown to see which limit is binding for your case.

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Glossary

Section 10(13A)
The Income Tax Act provision that exempts a portion of House Rent Allowance from tax for salaried employees who actually pay rent. Read with Rule 2A of the Income Tax Rules, 1962, which specifies the rule of three for computing the exempt amount.
Basic + DA
The basic salary plus Dearness Allowance components of your CTC, used as the denominator in the HRA formula. DA forms part of basic only when it forms part of retirement benefits per the employment terms; otherwise basic alone is used.
Metro (for HRA)
Strictly Mumbai, Delhi, Kolkata and Chennai per §10(13A). Bangalore, Hyderabad, Pune, Ahmedabad and other cities are non-metros for HRA purposes regardless of population, cost of living or municipal classification.
Form 12BB
The standard form an employee submits to their employer at the start of each financial year (and revised in January) declaring rent paid, landlord's name and PAN (if applicable), §80C investments, home loan interest and other tax-saving claims so that TDS can be computed accurately.
Rule 2A
The Income Tax Rules provision that operationalises §10(13A). It explicitly defines the three amounts and states that the least is exempt. It also clarifies that 'salary' for HRA purposes excludes overtime, commission (except commission on turnover at a fixed percentage), bonus and any other allowance.
Old vs New Tax Regime
The old tax regime allows deductions and exemptions including HRA, §80C and §80D, but applies higher slab rates. The new regime under §115BAC applies lower slab rates but disallows HRA, §80C investments (except employer NPS contribution) and most other deductions. Choice is made annually in the ITR.
Rent Receipt
A signed acknowledgement from a landlord confirming receipt of rent for a specified period. Income Tax authorities accept rent receipts plus, where applicable, the landlord's PAN as primary evidence of rent paid. Receipts on rent above ₹3,000 a month should bear a revenue stamp.