How to Calculate HRA Exemption for AY 2026-27

Calculate the exemption as the least of actual HRA received, rent paid minus 10% of HRA salary, and 50% of HRA salary for Mumbai, Kolkata, Delhi or Chennai—40% elsewhere. The balance of HRA received is taxable salary.

Legal or Computational Framework

This article uses the AY 2026–27 framework for income earned in FY 2025–26 under section 10(13A) of the Income-tax Act, 1961 read with Rule 2A. For this period, and in the current official departmental material reviewed on 1 August 2026, the 50% salary limb is restricted to Mumbai, Kolkata, Delhi and Chennai; all other locations use 40%. HRA exemption is ordinarily unavailable under the default new tax regime, so regime selection is a threshold eligibility question.

Worked Example

What Generic Pages Miss

Practical Documentation Checklist

• Salary slips and annual salary structure
• Form 16 and employer HRA working
• Rent agreement or occupancy document
• Rent receipts or bank payment trail
• Landlord PAN where annual rent reported to employer exceeds ₹1,00,000
• Period-wise city and rent details

For the complete rules on this topic, see the core guide: HRA Exemption: Rules, Formula and Maximum Limit.

See the broader Income Tax & Salary knowledge hub for related rules and calculators on this topic.

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