HRA Exemption Calculator 2026 (8 Metro Cities Rule)

If your salary includes house rent allowance and you live in a rented home, part or all of that HRA can be tax-free in the old tax regime. The exempt amount isn't simply your rent; it's the lowest of three figures, and the calculator works them out for you.

The HRA exemption rule

The exemption is the least of these three amounts, worked out for each month you pay rent:

The HRA you actually receive.
Rent paid minus 10% of your basic salary (plus dearness allowance, if any).
50% of basic if you live in a metro city, or 40% elsewhere.

HRA exemption = min(HRA received, rent − 10% of basic, 50% or 40% of basic)Taxable HRA = HRA received − HRA exemption

Which cities count as metros?

From April 2026 (FY 2026-27), the Income-tax Rules, 2026 treat eight cities as metros for the 50% limit: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Before that only Delhi, Mumbai, Kolkata and Chennai counted, which still applies to FY 2025-26 returns.

Noida, Gurugram, Thane and Navi Mumbai are separate cities on paper, so the 40% limit usually applies to them.

Worked example

Example: Basic ₹50,000, HRA ₹25,000, rent ₹30,000 a month

1. HRA received = ₹25,000.

2. Rent − 10% of basic = ₹30,000 − ₹5,000 = ₹25,000.

3. Metro: 50% of basic = ₹25,000. Non-metro: 40% = ₹20,000.

In a metro, the full ₹25,000 a month (₹3 lakh a year) is exempt. In a non-metro city, ₹20,000 a month is exempt and ₹60,000 a year is taxable.

Rules and documents to keep in mind

HRA exemption is available only in the old regime.
Give your employer rent receipts. If rent is more than ₹1 lakh a year, you also need the landlord's PAN.
Paying rent to a parent is allowed if they actually own the house, receive the money (ideally by bank transfer) and show it as income in their return. Paying rent to a spouse is generally not accepted.
If you don't get HRA from your employer at all, you may be able to claim a smaller deduction for rent separately.
If you own a house in the same city and still rent, the exemption is risky; get advice.

Whether claiming HRA makes the old regime worthwhile depends on your other deductions. Add it to the old vs new tax regime calculator to see.

How to use this calculator

Enter your monthly basic pay and DA.
Enter the HRA you receive and the rent you pay.
Choose your city.

FAQs

Can I claim HRA in the new tax regime?

No. HRA exemption is only available in the old regime.

Is Bengaluru a metro for HRA?

Yes, from April 2026 (FY 2026-27) under the Income-tax Rules, 2026. For FY 2025-26 returns, the old four-city list still applies.

What if I don't pay rent?

Then none of your HRA is tax-free.

Sources

Results are estimates for resident individuals under 60 and aren't tax, legal or financial advice. For your own return, check with a chartered accountant. Spotted a mistake? Tell us.

HRA exemption calculator