HRA Exemption Calculator

HRA exemption is the minimum of three limits: (1) Actual HRA received, (2) Rent paid minus 10% of basic salary, (3) 50% of basic for metro cities or 40% for non-metro. The lowest of these three is your exempt HRA.

No. HRA exemption is only available under the old tax regime. Under the new regime introduced in Budget 2020, HRA is fully taxable. This is one of the key reasons many people with high rent stick to the old regime.

Yes, you can pay rent to parents and claim HRA exemption. Your parents must show this rent as income in their tax return. Ensure there is a proper rent agreement and rent receipts. This is legal and commonly done.

Only four cities are classified as metro for HRA: Mumbai, Delhi (NCR), Kolkata, and Chennai. All other cities including Bengaluru, Hyderabad, Pune, and Ahmedabad are non-metro — they get 40% of basic.

Rent receipts (monthly, or annual above ₹1L), rent agreement, landlord PAN (if annual rent exceeds ₹1 lakh), and proof of rent payment (bank statements). Submit these to your employer for HRA exemption in Form 16.

Yes, if you own a house in a different city from where you work, you can claim both. For example, if you own a house in Mumbai but work and rent in Bengaluru, both deductions are allowed.

If rent paid minus 10% of basic is negative or zero, your HRA exemption is ₹0. This happens when rent is too low relative to salary. In such cases, switching to the new regime and getting the higher standard deduction may be better.

Your employer calculates HRA exemption based on the declarations and rent receipts you submit during the year. The exempt portion is excluded from taxable income in Part B of Form 16. Any remaining HRA is included in gross salary.