Estimate your exempt House Rent Allowance under Indian income tax rules.
Exempt HRA = minimum of: (1) actual HRA received, (2) rent paid − 10% of basic salary, (3) 50% of basic (metro) or 40% (non-metro).
Updated for FY 2026-27: Bengaluru, Hyderabad, Pune and Ahmedabad now count as metro (50% rate) alongside Delhi, Mumbai, Kolkata and Chennai. If you're filing for FY 2025-26 instead, these four cities still use the old 40% non-metro rate.
Illustrative estimate only — tax rules change frequently and vary by jurisdiction/circumstance. Verify with an accountant or official source before relying on this.
Riya lives in a metro city. Her basic salary is ₹40,000 a month, her employer pays ₹20,000 as HRA, and she pays ₹18,000 rent. The exemption is the lowest of three figures: the HRA actually received (₹20,000), rent paid minus 10% of basic (₹18,000 − ₹4,000 = ₹14,000), and 50% of basic for a metro (₹20,000). The lowest is ₹14,000, so ₹14,000 a month (₹1,68,000 a year) is exempt and the remaining ₹6,000 a month of HRA is taxable.
Notice that the middle condition decided the answer. If Riya's rent went up to ₹22,000, that condition would become ₹18,000 and her exemption would rise to ₹18,000 a month. Rent is usually the lever that changes the result.
Last reviewed: 5 November 2026 by the YogiCalc team · How we calculate and verify · Spotted an error? Tell us
From FY 2026-27, eight cities qualify for the 50% metro rate: Delhi, Mumbai, Kolkata, Chennai (the original four), plus Bengaluru, Hyderabad, Pune and Ahmedabad, newly added from 1 April 2026. All other cities use the 40% non-metro rate. Note: FY 2025-26 returns (due July 2026) still use the old 4-city rule.
The exempt amount is the lowest of: (1) actual HRA received, (2) rent paid minus 10% of basic salary, (3) 50% of basic salary if you live in a metro city, or 40% if you live elsewhere.
Yes, typically. Employers usually require rent receipts (and a PAN copy from the landlord if annual rent exceeds ₹1,00,000) to allow the exemption in TDS calculations. Keep proof of rent payment.
Generally yes, as long as the arrangement is genuine, rent is actually paid (ideally via bank transfer), and the family member declares it as rental income. Paying rent to a spouse is usually not accepted.
No. The HRA exemption can only be claimed under the old tax regime. If you choose the new regime, your full HRA is taxable, so compare both regimes before deciding.
If you do not pay rent, the exemption is nil and the entire HRA is taxable. The exemption only applies to rent you actually pay for accommodation you live in.