How This Is Calculated
For Tax Year 2026-27 onward, HRA exemption is computed under Schedule III (Table, S.No. 11) of the Income-tax Act, 2025, read with Rule 279 of the Income-tax Rules, 2026. For FY 2025-26 (AY 2026-27) and earlier, the governing provision is Section 10(13A) of the 1961 Act, read with Rule 2A. In both cases the exemption is the least of three amounts: (1) actual HRA received, (2) rent paid minus 10% of salary (basic + DA forming part of retirement benefit), and (3) 50% of salary for a metro city or 40% for any other city. HRA exemption is not available under the new tax regime and does not apply if you own and occupy the house, or pay no genuine rent. Which cities count as "metro" now depends on the financial year — use the table below or the Financial Year selector above.
Is HRA exemption available under the new tax regime? ▼
No. HRA exemption under Section 10(13A) is only available under the old tax regime. Salaried employees who opt for the new regime cannot claim it, regardless of how much rent they pay.
Which cities count as "metro" for the 50% HRA rate? ▼
It depends on the financial year you're calculating for. Tax Year 2026-27 (current): eight cities qualify for 50% — Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad — per the Income-tax Rules, 2026 (CBDT Notification No. 22/2026, G.S.R. 198(E), dated 20 March 2026). FY 2025-26 (AY 2026-27) and earlier: only the original four — Delhi, Mumbai, Kolkata and Chennai — qualify for 50%; Bengaluru, Hyderabad, Pune and Ahmedabad were at the 40% (non-metro) rate for that year. All other cities use 40% in both years. Use the Financial Year selector above the calculator to switch.
Has the HRA metro city list recently changed? ▼
Yes. The Income-tax Rules, 2026 (notified 20 March 2026, effective 1 April 2026, i.e. FY 2026-27) expanded the 50%-HRA metro list from 4 to 8 cities, adding Bengaluru, Hyderabad, Pune and Ahmedabad to the existing Delhi, Mumbai, Kolkata and Chennai. This is part of the broader move to the new Income-tax Act, 2025 and its accompanying Rules, 2026, which replaced the 1961 Act and 1962 Rules.
Do I need my landlord's PAN to claim HRA? ▼
Yes, if the annual rent paid exceeds ₹1,00,000 (i.e., roughly ₹8,333/month or more), your employer will require the landlord's PAN to process the HRA exemption in Form 12BB. Without it, your employer may deduct TDS as if no exemption applies.
Can I claim HRA if I pay rent to my parents? ▼
Yes, if the arrangement is genuine — a rental agreement, actual rent paid (ideally via bank transfer, not cash), and the parents declaring this rent as their income. It cannot be claimed if you jointly own the house you're supposedly renting.
Can I claim both HRA exemption and home loan interest deduction? ▼
Yes, if the facts are genuinely separate — for example, you rent accommodation in the city where you work while your own home (bought on loan) is in another city, or is rented out. Claiming both for the same property in the same city without genuine separate facts is not permitted.
What is the exact HRA exemption formula? ▼
Exempt HRA = the lowest of: (a) HRA actually received, (b) rent paid minus 10% of (basic + DA + commission on turnover, if any), (c) 50% of that salary figure in a metro city or 40% elsewhere. Anything above the exempt amount is added to taxable salary.