HRA exemption calculator
Enter your basic salary, HRA and rent. You see the three limits, which one applies and how much of your HRA is exempt, for Tax Year 2026-27 or FY 2025-26. From April 2026, Bengaluru, Hyderabad, Pune and Ahmedabad are at 50%.
Formula per section 10(13A) and the Income-tax Rules, 2026 city list · Reviewed by Regikart's CA team · 25 October 2026
DA only if it counts for retirement benefits; add commission fixed as a % of turnover.
Exempt HRA: ₹1,80,000 a year
Taxable HRA ₹1,20,000 a year · about ₹15,000 a month exempt
The exemption is the lowest of three amounts (yearly)
| (a)HRA received | ₹3,00,000 |
| (b)Rent paid minus 10% of salaryLowest | ₹1,80,000 |
| (c)50% of salary (50% city) | ₹3,00,000 |
From Tax Year 2026-27, the Income-tax Rules 2026 apply 50% to Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad, and 40% elsewhere. HRA exemption is available only under the old regime. If your salary, HRA or rent changed during the year, work out each period separately.
Need help claiming HRA or choosing a regime?
Send us this result. A Chartered Accountant checks your HRA, compares both regimes and files your return.
Or send this on WhatsAppCities at 50% and 40%
| Year | 50% of salary | 40% of salary |
|---|---|---|
| FY 2025-26 | Delhi, Mumbai, Kolkata, Chennai | Every other city |
| Tax Year 2026-27 onwards | Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad | Every other city |
A worked example
You live in Pune in Tax Year 2026-27, with basic salary of ₹50,000 a month (₹6,00,000 a year), HRA of ₹25,000 a month (₹3,00,000) and rent of ₹30,000 a month (₹3,60,000). The three limits are ₹3,00,000 HRA received, ₹3,00,000 rent minus 10% of salary, and ₹3,00,000 at 50% of salary. All your HRA is exempt. In FY 2025-26 the third limit would have been 40%, or ₹2,40,000, leaving ₹60,000 taxable.
Keep the evidence. Rent receipts or a rent agreement, and proof of payment, support the claim with your employer and in your return. If your employer did not allow the full exemption, you can still claim it in your income tax return under the old regime.
Questions
How is HRA exemption calculated?
The exempt amount is the lowest of three: the HRA you actually received; rent paid minus 10% of salary; and 50% of salary in the listed cities or 40% elsewhere. Salary here means basic pay, dearness allowance that counts for retirement benefits, and commission fixed as a percentage of turnover.
Which cities get 50% from Tax Year 2026-27?
Delhi, Mumbai, Kolkata and Chennai, plus Bengaluru, Hyderabad, Pune and Ahmedabad, which the Income-tax Rules, 2026 (notified on 20 March 2026) added from 1 April 2026. Every other city is at 40%.
Does the change apply to my FY 2025-26 return?
No. For FY 2025-26 (the return filed in 2026), only Delhi, Mumbai, Kolkata and Chennai are at 50%. Bengaluru, Hyderabad, Pune and Ahmedabad move to 50% for rent paid from April 2026.
Can I claim HRA under the new tax regime?
No. HRA exemption is available only if you choose the old regime. Compare both with our income tax calculator before you decide.
What if I don't get HRA from my employer?
A deduction for rent paid is available under separate rules (section 80GG of the 1961 Act), with its own limits and conditions, only under the old regime. Ask us to check whether you qualify.
I pay rent to my parents. Can I claim HRA?
It can be claimed if the rent is genuinely paid, the parent owns the house and declares the rent as income, and you keep rent receipts and a bank trail. Rent paid to a spouse is generally not accepted.