HRA Exemption Calculator 2026-27
Work out how much of your house rent allowance is exempt from tax under rule 279 of the Income-tax Rules, 2026, and how much is taxable.
Researched by Mirza Seraj BaigFacts last checked against official sources on 12 September 2026Dearness allowance counts only if your terms of employment provide for it. Other allowances do not.
50% of salary counts in these eight cities from 1 April 2026; 40% everywhere else.
HRA exempt from tax in a year
₹1,56,000
≈ 1.56 lakh
- Exempt
- 65%
- Taxable
- 35%
- HRA received in the year
- ₹2,40,000
- Rent paid minus 10% of salary
- ₹1,56,000
- 50% of salary
- ₹3,00,000
- Taxable HRA
- ₹84,000
Your rent is over ₹1,00,000 a year, so your employer will ask for your landlord’s name, address and PAN. HRA exemption applies only under the old tax regime.
What is HRA exemption?
House rent allowance is the part of your salary your employer pays towards rent. Under the old tax regime, part of it is exempt from tax if you live in rented accommodation you do not own. Rule 279 of the Income-tax Rules, 2026 sets how much.
The limit is 50% of salary in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, and 40% everywhere else. The new tax regime allows no HRA exemption.
Deciding between the regimes? Compare both with the income tax calculator.
How is HRA calculated?
Under rule 279 of the Income-tax Rules, 2026, the exempt part of HRA is the least of: the HRA actually received; rent paid minus 10% of salary; and 50% of salary in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad or Bengaluru, or 40% anywhere else. Salary means basic pay plus dearness allowance where the terms of employment provide for it, and excludes other allowances and perquisites. The rest of the HRA is taxable. The exemption is not available under the new tax regime.
HRA exemption example: ₹20,000 HRA, ₹18,000 rent
Basic pay plus DA is ₹50,000 a month (₹6,00,000 a year), HRA is ₹20,000 a month (₹2,40,000) and rent is ₹18,000 a month (₹2,16,000), in Bengaluru. Rent minus 10% of salary is ₹1,56,000; 50% of salary is ₹3,00,000.
The exemption is the least of the three: ₹1,56,000 a year. The remaining ₹84,000 of HRA is taxable.
The city matters only when the salary limit is the smallest. With HRA and rent both ₹30,000 a month on the same salary, the exemption is ₹3,00,000 in the eight named cities but ₹2,40,000 anywhere else.
HRA exemption at different rents
Basic pay plus DA of ₹50,000 a month and HRA of ₹20,000 a month, for a full year.
| Monthly rent | Exempt (eight cities) | Exempt (elsewhere) | Taxable HRA (eight cities) |
|---|---|---|---|
| ₹5,000 | ₹0 | ₹0 | ₹2,40,000 |
| ₹10,000 | ₹60,000 | ₹60,000 | ₹1,80,000 |
| ₹15,000 | ₹1,20,000 | ₹1,20,000 | ₹1,20,000 |
| ₹20,000 | ₹1,80,000 | ₹1,80,000 | ₹60,000 |
| ₹25,000 | ₹2,40,000 | ₹2,40,000 | ₹0 |
| ₹30,000 | ₹2,40,000 | ₹2,40,000 | ₹0 |
| ₹40,000 | ₹2,40,000 | ₹2,40,000 | ₹0 |
Frequently asked questions
How is HRA exemption calculated?
It is the least of three amounts: the HRA you actually receive; the rent you pay minus 10% of your salary; and 50% of salary in the eight named cities, or 40% elsewhere. Salary here is basic pay plus DA.
Which cities get the 50% HRA limit from 2026-27?
Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, under rule 279 of the Income-tax Rules, 2026, which came into force on 1 April 2026. Everywhere else the limit is 40% of salary.
Can I claim HRA exemption under the new tax regime?
No. Section 202 of the Income-tax Act, 2025 computes income under the new regime without the HRA exemption. It is available only if you opt for the old regime.
Do I need my landlord's PAN to claim HRA?
Yes, if the rent you pay in the tax year exceeds ₹1,00,000. The declaration to your employer (Form 124 under rule 205) asks for the landlord's name, address and PAN in that case.
Is any HRA exempt if I do not pay rent?
No. With no rent paid, "rent minus 10% of salary" is nil, so the exemption is ₹0 and all of the HRA is taxable.