Financial Calculators
HRA Exemption Calculator
Three numbers decide how much of your HRA escapes tax. Compute the least of them in seconds.
HRA exempt per year
₹1,68,000
₹14,000 per month
- HRA received monthly
- ₹20,000
- Taxable HRA monthly
- ₹6,000
Exemption is the least of: HRA received, rent paid minus 10% of basic, and 50% of basic in metro cities (40% elsewhere). Applies under the old tax regime only; keep rent receipts and, where required, the landlord's PAN.
The least-of-three rule, demystified
House Rent Allowance is taxable except for the portion exempted by a three-way comparison: the HRA you actually receive, the rent you pay minus 10% of basic salary, and 50% of basic in metro cities (40% elsewhere). The least of the three is exempt; the rest is taxed with your salary.
The exemption applies under the old tax regime for those actually paying rent, with documentation: rent receipts, and the landlord's PAN where annual rent crosses the prescribed threshold. Set the metro switch to 1 for Delhi, Mumbai, Kolkata or Chennai.
The rule
Exempt HRA = least of:\n 1. HRA received\n 2. Rent paid - 10% of basic\n 3. 50% of basic (metro) or 40% (non-metro)Worked example: a basic of Rs 40,000, HRA of Rs 20,000, rent of Rs 18,000 in a metro: the three values are Rs 20,000, Rs 14,000 and Rs 20,000, so Rs 14,000 per month (Rs 1,68,000 a year) is exempt and Rs 6,000 per month of HRA remains taxable.
Frequently asked questions
Does HRA exemption apply in the new tax regime?
No; the exemption is available under the old regime. Compare regimes for your full salary structure before deciding, which we help clients do each April.
Can I claim HRA while paying rent to parents?
Yes, if rent is genuinely paid and documented, and the parent declares it as income. Keep the paper trail clean.
Which cities count as metro?
Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limb; all other cities use 40% of basic.
What documents do I need?
Rent receipts, the rental agreement ideally, and the landlord's PAN where annual rent exceeds the prescribed threshold.
Structure the salary, then the savings.
Regime choice, HRA, 80C: we set the full tax picture in April so March is quiet.