HRA Exemption Calculator

It is the least of three amounts: the HRA actually received; rent paid minus 10% of basic plus DA; and 50% of basic plus DA in the eight cities Rule 279 names or 40% elsewhere. Whichever is smallest is exempt, and the balance of your HRA is taxable.

From tax year 2026-27, eight: Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, under Rule 279(1)(c) of the Income-tax Rules 2026. They use the 50% limb. Gurugram, Noida and every other place use 40%, regardless of size or cost of living.

No. The HRA exemption is available under the old regime only. Renters with a large HRA component are among the taxpayers most likely to find the old regime cheaper overall.

Rent paid to a parent who owns the property can qualify where the arrangement is genuine — rent is actually paid and the owner declares it as income. Documentation matters, and this is an area where a qualified tax professional is worth consulting.

Where annual rent exceeds ₹1,00,000, the landlord’s PAN is required for the exemption through payroll. From tax year 2026-27 the declaration to your employer is Form No. 124 under Rule 205, which also asks for your relationship with the landlord, if any. Rent receipts and proof of payment are normally expected alongside it.

The HRA exemption applies only to an HRA component in your salary. A separate provision, Section 80GG, covers some taxpayers who pay rent without receiving HRA, with its own limits and conditions.

Yes, from 1 April 2026. Rule 279(1)(c) of the Income-tax Rules 2026 names Bengaluru among the eight cities that use the 50% limb, for tax year 2026-27 onward under the old regime. Before 1 April 2026, under the old Rule 2A, Bengaluru used 40%.

It is possible where the facts genuinely support both — for example you own a property in one city and rent in another for work, or your own property is let out. Claiming both while living in the home you own is where problems arise. The circumstances matter, so this is worth confirming with a qualified tax professional.

Employers normally require them to allow the exemption through payroll, along with the landlord’s PAN where annual rent exceeds ₹1,00,000. Keeping proof of actual payment matters too — a receipt without a corresponding bank transfer is weak evidence if the claim is ever examined.

The exemption is worked out for each period separately, because the rent, the HRA received and the 50% or 40% limb may all differ. Moving from Mumbai to Jaipur, for instance, drops the third limb from 50% to 40% for the remaining months; moving from Mumbai to Pune does not, since both are among the eight 50% cities.