House Rent Allowance (HRA) is one of the most valuable tax exemptions available to salaried employees in India — yet it's also one of the most misunderstood. If you're paying rent and receiving HRA as part of your salary package, you're entitled to claim a tax exemption under Section 10(13A) of the Income Tax Act. The HRA calculator makes this calculation effortless: enter your salary, HRA received, and rent paid, and get your exact exemption in seconds.
This guide explains the three-condition formula used to compute HRA exemption, compares metro (Delhi, Mumbai, Kolkata, Chennai) vs non-metro rules, walks through a real ₹6 LPA salary example, and clarifies whether HRA exemption is available under the new tax regime.
Calculate Your HRA Exemption Instantly
Enter your basic salary, HRA received, rent paid, and city — get your exact tax-exempt HRA in seconds.
The Three-Condition HRA Exemption Formula Under Section 10(13A)
Your HRA exemption under Section 10(13A) is the minimum of the following three amounts. Whatever is least is the tax-free portion; any HRA above that becomes taxable.
The Three Conditions
- Actual HRA received from the employer during the year.
- 50% of basic salary (if living in a metro city: Delhi, Mumbai, Kolkata, Chennai) OR 40% of basic salary (for all other cities).
- Actual rent paid minus 10% of basic salary.
The term "basic salary" here includes Basic Pay + Dearness Allowance (DA). If your employer includes DA in the HRA computation, use (Basic + DA); otherwise use only Basic.
HRA Calculation Example: ₹6 LPA Salary in Delhi vs Pune
Let's apply the formula to a salaried employee with a ₹6 lakh per annum (₹50,000/month) package. We compare two cities — Delhi (metro) and Pune (non-metro).
Employee Profile
- Basic Salary: ₹25,000/month (₹3,00,000/year)
- HRA received: ₹12,500/month (₹1,50,000/year)
- Rent paid: ₹15,000/month (₹1,80,000/year)
| Condition | Delhi (Metro — 50%) | Pune (Non-Metro — 40%) |
|---|---|---|
| 1. Actual HRA Received | ₹1,50,000 | ₹1,50,000 |
| 2. 50%/40% of Basic | ₹1,50,000 | ₹1,20,000 |
| 3. Rent − 10% of Basic | ₹1,80,000 − ₹30,000 = ₹1,50,000 | ₹1,80,000 − ₹30,000 = ₹1,50,000 |
| Exemption (Minimum) | ₹1,50,000 | ₹1,20,000 |
In Delhi, the full HRA of ₹1.5 lakh is exempt (zero taxable HRA). In Pune, ₹1.2 lakh is exempt and the remaining ₹30,000 is taxable income. This difference alone saves ₹9,000 in tax annually for someone in the 30% slab choosing Delhi over Pune — purely from the metro designation.
HRA Exemption in New Tax Regime vs Old Tax Regime (2026)
This is the most critical HRA question for salaried employees in 2026:
Old Tax Regime
HRA exemption under Section 10(13A) is fully available. If you pay significant rent (especially in metros like Mumbai or Delhi), the old regime often wins because of the large HRA exemption plus 80C/80D deductions.
New Tax Regime (Default from FY 2024-25)
HRA exemption is NOT available under the new tax regime. You receive the full HRA as taxable salary. The new regime compensates with lower tax slabs and a higher standard deduction (₹75,000 from FY 2024-25), but for high-rent payers in metros, the old regime is often more beneficial.
Quick Comparison for ₹12 LPA Salary (Metro, ₹20,000 rent/month)
| Metric | Old Regime | New Regime |
|---|---|---|
| HRA Exemption | ~₹1,44,000 | ₹0 |
| Standard Deduction | ₹50,000 | ₹75,000 |
| 80C Deduction | ₹1,50,000 | ₹0 |
| Effective Tax Saving | Higher (for rent payers) | Lower |
Rule of thumb: If your annual rent exceeds ₹1.8 lakh AND you have 80C investments, the old regime is likely better. Otherwise, the new regime's simplicity and lower rates may win.
Documents Required to Claim HRA: Rent Receipts and PAN Rules
To claim HRA exemption, you need to submit proof of rent payment to your employer (typically during the annual tax declaration process in January–March):
Required Documents
- Rent receipts: Monthly or quarterly rent receipts signed by the landlord. Must include date, amount, landlord's name, address, and your name as tenant.
- Landlord's PAN: Mandatory if annual rent exceeds ₹1,00,000 (i.e., ₹8,334+/month). Submit the PAN card copy to your employer.
- Rent agreement: A registered or notarised rent agreement is not legally required for HRA claims but strongly recommended as supporting evidence during IT scrutiny.
Rent Paid to Parents — Is It Allowed?
Yes — you can pay rent to your parents and claim HRA, provided the arrangement is genuine. Your parent must declare this rental income in their own ITR. Ensure bank transfers (not cash) are made, and keep a proper rent agreement. The tax department has accepted such arrangements, but they scrutinise them carefully.
Can You Claim HRA Without Rent Receipts?
If rent is under ₹3,000/month, some employers don't require receipts. But during an IT assessment, the AO can ask for proof at any time. It's always safest to maintain proper receipts even for small amounts.
Can You Claim Both HRA Exemption and Home Loan Tax Benefits?
A common question: can you claim HRA (you're paying rent) AND Section 24(b) interest deduction (you have a home loan)? The answer is yes, in specific scenarios.
Allowed Scenario
You own a house in Chennai but work in Bengaluru and pay rent there. You can claim HRA for the Bengaluru rent AND the home loan interest deduction on your Chennai property (either as self-occupied with a ₹2L cap, or as deemed let-out with full interest deductible).
Not Allowed Scenario
You own a house in the same city where you work (say Mumbai) but prefer to live on rent in a different neighbourhood. The IT department may reject your HRA claim, arguing that your own house is available for you to live in.
Key IT Department Stance
Courts have consistently held that if the workplace is genuinely far from the owned property, or the property is under construction, you can claim both simultaneously. Document your case carefully — keep the ownership proof, home loan statement, and rent receipts all together.
How to Use the Tool (Step by Step)
- 1
Enter basic salary
Type your monthly basic salary as shown on your payslip.
- 2
Enter HRA received
Enter the HRA component from your salary structure.
- 3
Enter rent paid
Type the monthly rent you pay for your accommodation.
- 4
Select city type
Choose metro (Delhi, Mumbai, Kolkata, Chennai) or non-metro for the correct exemption rate.
- 5
View HRA exemption
See the exempt HRA amount and taxable HRA under Section 10(13A).
Frequently Asked Questions
What is the HRA exemption formula under Section 10(13A)?+−
The HRA exemption is the minimum of three amounts: (1) actual HRA received from employer, (2) 50% of basic salary for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metros, and (3) actual rent paid minus 10% of basic salary. The lowest of these three figures is tax-exempt; any HRA above that is taxable as salary.
Is HRA exempt in the new tax regime for FY 2025-26?+−
No. HRA exemption under Section 10(13A) is not available under the new default tax regime. If you opt for the new regime, your entire HRA is taxed as part of your salary income. The new regime compensates with a higher standard deduction of ₹75,000 and lower slab rates. For employees paying high rent in metro cities, the old regime often remains more tax-efficient.
Do I need to submit the landlord's PAN for HRA claims?+−
Yes, if your annual rent exceeds ₹1,00,000 (more than ₹8,333 per month), you must submit your landlord's PAN to your employer while filing your tax declaration. The employer is required to report this in Form 16. Failure to submit the landlord's PAN means your employer may not grant the full HRA exemption and will deduct TDS accordingly.
Can I claim HRA if I live in my parents' house and pay them rent?+−
Yes, you can pay rent to your parents and claim HRA exemption, provided the arrangement is genuine — your parents actually own the property and declare the rental income in their own ITR. Make payments via bank transfer, maintain a rent agreement, and keep rent receipts. Cash payments are risky and may not be accepted during scrutiny. This is a legal and widely accepted tax-planning strategy.
What if my HRA is not mentioned in my salary slip?+−
If HRA is not a separate component of your CTC (common in smaller companies or for self-employed professionals), you cannot claim HRA exemption under Section 10(13A). However, you may be able to claim deduction under Section 80GG (for those not receiving HRA), which allows a deduction of up to ₹60,000 per year (₹5,000/month) for rent paid, subject to conditions. Use our HRA calculator to determine which provision applies to you.
Calculate Your HRA Exemption Instantly
Enter your basic salary, HRA received, rent paid, and city — get your exact tax-exempt HRA in seconds.
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