HRA exemption in Mumbai: the 50% rule worked out (FY 2026-27)
Mumbai counts as a 50% city for HRA in FY 2026-27: the exemption is the lowest of the HRA you receive, rent paid minus 10% of basic + DA, and 50% of basic + DA. For example, on ₹60,000 basic, ₹30,000 HRA and ₹40,000 rent a month, about ₹3,60,000 a year of HRA is tax-free. HRA exemption is available only under the old tax regime.
Try it on your numbers in the HRA exemption calculatorWhy Mumbai gets 50%
From 1 April 2026 the 50% limit applies to eight cities: Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad, Bengaluru. Mumbai is on that list.
The other two limits are the same everywhere: the HRA actually received, and rent paid minus 10% of basic + DA. The smallest of the three is exempt.
Worked examples in Mumbai
Example pay and rent figures, not yours and not a survey of rents. Put your own into the HRA calculator.
| Basic + DA | HRA received | Rent paid | Exempt a year in Mumbai | Exempt a year elsewhere |
|---|---|---|---|---|
| ₹40,000 | ₹20,000 | ₹25,000 | ₹2,40,000 | ₹1,92,000 |
| ₹60,000 | ₹30,000 | ₹40,000 | ₹3,60,000 | ₹2,88,000 |
| ₹1,00,000 | ₹50,000 | ₹60,000 | ₹6,00,000 | ₹4,80,000 |
Which limit decides your exemption
On ₹60,000 basic and ₹30,000 HRA a month, rent of ₹36,000 a month or more is needed to use the full 50% limit (₹30,000). Below that, rent minus 10% of basic sets the exemption, and every extra ₹1,000 of rent makes ₹1,000 more of HRA tax-free.
What counts is the city where the rented home is, not where your employer is registered.
| Rent paid | Rent minus 10% of basic | HRA exempt | HRA taxable | Limit that decides |
|---|---|---|---|---|
| ₹15,000 | ₹9,000 | ₹9,000 | ₹21,000 | Rent minus 10% of basic |
| ₹25,000 | ₹19,000 | ₹19,000 | ₹11,000 | Rent minus 10% of basic |
| ₹36,000 | ₹30,000 | ₹30,000 | ₹0 | HRA received = 50% of basic |
| ₹50,000 | ₹44,000 | ₹30,000 | ₹0 | HRA received = 50% of basic |
Old regime only
The new tax regime does not allow the HRA exemption. If you are on the new regime, all of your HRA is taxable, and the comparison that matters is the regime choice itself.
HRA exemption
Questions people ask
Is Mumbai a metro for HRA?
Yes. Mumbai is one of the eight cities where the third limit is 50% of basic + DA, not the 40% used everywhere else.
What if I pay rent to my parents?
You can claim it if the rent is genuinely paid and your parent shows it as income in their own return. Keep rent receipts and bank transfers as proof.
Is HRA exemption available in the new regime?
No. Under the new regime the whole HRA you receive is taxable, so the figures on this page apply only if you file under the old regime.
Do I need my landlord’s PAN?
Your employer asks for the landlord’s PAN when the rent you pay goes above ₹1 lakh in the year. Below that, rent receipts are usually enough.
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Try it nowLast updated 27 October 2026. Figures reflect FY 2026-27 and are educational estimates, not advice. Muktify is not SEBI-registered and never recommends or ranks any instrument. How we write and check guides.