Rajkumar Anguluri·Software Engineer · Founder, Artha Engine·Last reviewed 8 April 2026·Methodology
Independent decision-support tool. Artha Engine is not a financial services provider, does not sell loans or insurance, and has no commission relationships with banks or insurers.
HRA Exemption Calculator
Is your HRA pulling its weight in your tax filing? See the exempt portion, which limb of the three-part rule is binding you, and whether restructuring rent or salary would raise your exemption.
Your salary & rent
Enter your monthly salary components and rent paid. The three-limb rule picks the binding exemption.
HRA exempt from tax (annual)
₹3L
₹25,000 exempt per month
The binding limb is the actual HRA received — the other two are higher.
Keep rent receipts and (if rent > ₹1L/year) the landlord's PAN ready before filing.
Actual HRA
₹3L
50% of salary
₹3L
Rent − 10% salary
₹3L
Final exemption
₹3L
Taxable HRA
₹0
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Breakdown
- Actual HRA received₹3L33.3%
- 50% of salary₹3L33.3%
- Rent paid − 10% of salary₹3L33.3%
Benchmarks
If rent rose 15%
You
₹3L
Benchmark
₹3L
Higher rent lifts the rent-minus-10% limb.
If this were a non-metro city
+25.0%You
₹3L
Benchmark
₹2.4L
Metro cities get 50% of salary; non-metro gets 40%.
If HRA were 50% of basic
You
₹3L
Benchmark
₹3L
Ask your employer to restructure HRA to match salary norms.
What moves the result most
Holding everything else fixed, here is how the headline shifts when each input swings by a typical range.
Meaningful HRA exemption worth claiming
Keep rent receipts, landlord PAN (if rent > ₹1L/year), and the rental agreement. The old regime lets you claim this exemption.
Next best actions
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At a glance
- What it does
- Computes the maximum HRA tax exemption you can claim in the old regime using the three-limb rule (actual HRA, 50%/40% of salary, and rent minus 10% of salary).
- Metro vs non-metro
- 50% of basic+DA for Delhi, Mumbai, Kolkata, Chennai. 40% for every other city (including Bengaluru, Hyderabad, Pune).
- Typical output
- On ₹50,000 basic + ₹25,000 HRA + ₹30,000 rent in a metro, the annual HRA exemption is ₹3L — and ₹60k of HRA remains taxable.
- Best used for
- Stress-testing the old regime benefit before choosing it, and computing rent receipts you need to justify at filing time.
How It Works
See how your inputs are used to calculate the result.
- HRA exemption = minimum of: (1) actual HRA received, (2) 50% of salary for metro (40% for non-metro), (3) rent paid − 10% of salary.
- Salary here means basic pay plus dearness allowance (DA), excluding other components.
- Only the old tax regime allows HRA exemption — the new regime does not.
Assumptions
The recommendation stays blunt, but the assumptions remain visible.
- Metro cities for HRA purposes are Delhi, Mumbai, Kolkata, and Chennai. Bengaluru, Hyderabad, and Pune are technically non-metro.
- Rent receipts are required; landlord PAN is mandatory when annual rent exceeds ₹1L.
- This exemption is only claimable when you actually pay rent and are not living in your own property.
FAQ
The follow-up questions people usually ask after the main recommendation is already clear.
Can I claim HRA exemption in the new tax regime?
No. Section 115BAC (the new regime) removes most deductions, including HRA. If HRA is a meaningful chunk of your tax savings, the old regime is usually better.
Can I claim HRA if I pay rent to my parents?
Yes, if the arrangement is genuine: your parents must own the property, you must actually pay rent, and they must declare it as income. Keep rent receipts and a rental agreement.
Is Bengaluru a metro for HRA?
No — for HRA purposes, only Delhi, Mumbai, Kolkata, and Chennai count as metro. Bengaluru uses the 40% limb despite being a major city.
Sources & references
Every formula and assumption above is grounded in these authoritative sources.
Related tools & decisions
Keep going from here — each link carries the same cluster context.
What to do next
Related guides
Long-form explainers that put the math behind this tool in context.
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HRA Paying Rent to Parents (2026): The Legitimate Way to Save Tax
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Calculations and decision frameworks, not personalised financial advice. The numbers on this page are based on the inputs you supplied and the regulatory rules in effect when this page was last reviewed. They are not a recommendation to buy, sell, hold, port, or surrender any specific financial product. Consult a SEBI-registered investment advisor, a qualified tax professional, or a licensed insurance broker before acting on a financial decision involving your money.
Artha Engine is an educational decision-support website. We do not offer loans, sell insurance, distribute mutual funds, provide regulated investment advice, collect loan applications, or receive commissions from banks, insurers, AMCs, brokers, or other financial providers. References to RBI, SEBI, IRDAI, Income Tax Department, or other authorities are source citations only. Artha Engine is not affiliated with, endorsed by, or sponsored by any government authority, regulator, bank, insurer, AMC, or broker. Artha Engine does not charge users fees for using calculators, comparison tools, articles, or financial health scoring. Mailing address: India.
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