HRA Calculator

The tax-free part of your HRA is the lowest of three amounts:

1. The HRA you actually received
2. Rent paid minus 10% of your salary
3. 50% of your salary if you live in one of the listed cities, or 40% anywhere else

Here “salary” means your basic pay plus dearness allowance (DA) if your employment terms include it. Other allowances, bonuses and perquisites don’t count. Whatever HRA isn’t exempt is added to your taxable salary.

The rule is in section 10(13A) and Rule 2A for FY 2025-26, and in section 11 with Schedule III of the Income-tax Act 2025 and Rule 279 of the Income-tax Rules 2026 from tax year 2026-27. The formula didn’t change; the city list did.

The Income-tax Rules 2026, notified on 20 March 2026, added Bengaluru, Hyderabad, Pune and Ahmedabad to the 50% list from tax year 2026-27 (April 2026 to March 2027). The rules name cities only, so nearby areas such as Gurugram, Noida, Thane and Navi Mumbai aren’t listed; this calculator treats them as 40%.

Say your basic salary is ₹60,000 a month, your HRA is ₹30,000 a month and you pay ₹35,000 a month in rent. Over a year, salary is ₹7,20,000, HRA ₹3,60,000 and rent ₹4,20,000.

₹60,000 more of your HRA becomes tax-free. In the 30% slab, that’s about ₹18,720 less tax a year including cess.

No. HRA exemption is available only if you choose the old regime, in both FY 2025-26 and tax year 2026-27. In the new regime (the default), your whole HRA is taxable, but you get lower slab rates, a ₹75,000 standard deduction (₹50,000 in the old regime) and no tax on income up to ₹12 lakh after the rebate.

If you pay high rent in a 50% city, the old regime can still work out cheaper. Compare both with the tax saving calculator.

• Rent receipts or a rent agreement, as your employer asks.
• Your landlord’s PAN if the rent is more than ₹1,00,000 a year.
• The employer declaration form: Form 12BB for FY 2025-26, and the new Form 124 from tax year 2026-27, which also asks for your landlord’s Aadhaar and your relationship to them.

If your employer didn’t apply the exemption, you can still claim it in your income tax return under the old regime, as long as you have the documents.

Paying rent to your parents? This is generally accepted if a parent owns the home, you really pay the rent, and they show it as income in their return. Read claiming HRA on rent paid to parents before you do.

If you pay rent but your salary has no HRA component, or you’re self-employed, you can deduct rent under section 80GG (FY 2025-26) or section 134 of the Income-tax Act 2025 (from tax year 2026-27). The deduction is the lowest of:

1. ₹5,000 a month (₹60,000 a year)
2. 25% of your total income
3. Rent paid minus 10% of your total income

It’s old-regime only, and you can’t claim it if you, your spouse or your minor child own a home where you live or work. You file a declaration with your return: Form 10BA for FY 2025-26, and Form 31 from tax year 2026-27. Use the “I don’t get HRA” tab above to work it out.