How to use it
- 1Pick the financial year. This matters: from FY 2026-27 the 50% limit covers eight cities, and before that only four.
- 2Choose whether you are entering monthly figures or yearly ones. If you rented for part of the year, enter monthly amounts and change the number of months.
- 3Enter basic pay, the HRA you receive and the rent you pay. Add dearness allowance only if it counts towards retirement benefits, and commission only if it is a fixed percentage of turnover.
- 4Choose the city you rent in. The four cities added in 2026 are marked when you pick them.
- 5Read the three amounts. The smallest is your exemption; the rest of your HRA is taxed.
The three limits, and why the smallest wins
The exemption is the least of:
- The HRA you actually received
- Rent paid minus 10% of salary
- 50% of salary in the eight listed cities, 40% everywhere else
Take someone in Bengaluru with basic pay of ₹6,00,000, HRA of ₹3,00,000 and rent of ₹4,00,000 for the year:
| FY 2025-26 (old rules) | FY 2026-27 (new rules) | |
|---|---|---|
| HRA received | ₹3,00,000 | ₹3,00,000 |
| Rent − 10% of salary | ₹3,40,000 | ₹3,40,000 |
| % of salary | ₹2,40,000 (40%) | ₹3,00,000 (50%) |
| Exempt | ₹2,40,000 | ₹3,00,000 |
| Taxable HRA | ₹60,000 | nil |
Same salary, same rent, same city — ₹60,000 more exempt, purely because Bengaluru moved into the 50% list. If you are in Bengaluru, Hyderabad, Pune or Ahmedabad, this is the year to check your figures again.
What counts as “salary” here
Only basic pay, dearness allowance that counts towards retirement benefits, and commission fixed as a percentage of turnover. Not conveyance, not special allowance, not the employer’s PF contribution, not your CTC. People usually put their whole package in and get an answer that is far too generous.
Keep the paperwork
Claiming HRA needs rent receipts, and above ₹1,00,000 a year it needs the landlord’s PAN and a statement of how you are related to them. Pay by bank transfer or UPI rather than cash so there is a trail. You can generate a year of numbered receipts with our rent receipt format, and see the salary split your employer is using on your salary slip.
What this page is not
This is a calculator, not tax advice. It works out the exemption under Schedule III and rule 279 on the figures you type. Whether the old regime is better for you overall, and how HRA sits with your other deductions, depends on your whole return: for anything unusual, ask a chartered accountant.
Questions people ask
How is HRA exemption calculated?
It is the least of three amounts: the HRA you actually received; the rent you paid minus 10% of salary; and 50% of salary if you rent in one of the eight listed cities, or 40% anywhere else. 'Salary' here is basic pay plus dearness allowance that counts towards retirement benefits plus commission fixed as a percentage of turnover. It is not your gross package.
Which cities get the 50% limit now?
From FY 2026-27 there are eight: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Until FY 2025-26 only the first four qualified and everywhere else, Bengaluru included, was 40%. Rule 279 of the Income-tax Rules, 2026 sets the list.
What changed on 1 April 2026?
The Income-tax Act, 2025 replaced the Income-tax Act, 1961, and the Income-tax Rules, 2026 were notified on 20 March 2026. HRA is now in Schedule III, Table S. No. 11 of the Act, read with rule 279, instead of section 10(13A) read with rule 2A. The arithmetic did not change; the list of 50% cities did, and the paperwork got stricter.
Can I claim HRA under the new tax regime?
No. The HRA exemption exists only in the old regime. The new regime is the default, so if you want this exemption you have to choose the old regime and check whether it leaves you better off overall once you count everything else you would give up.
Do I need my landlord's PAN?
If the HRA you claim for the year is more than ₹1,00,000, you must give the landlord's name, address and PAN. Under the 2026 rules you must also state your relationship with the landlord, in Form 124. If the landlord has no PAN, get a signed declaration from them saying so.
Can I pay rent to my parents?
Yes, if it is real. The property must be owned by them and not by you, the rent must actually leave your account, and they must show it as income in their own return. Keep the receipts and the bank transfers. The relationship now has to be declared, so an arrangement on paper only is easy to spot and is treated as evasion.
Why is my exemption zero?
Because rent paid minus 10% of salary came out at zero or less: your rent is not more than 10% of your salary. The exemption is meant to relieve rent above that floor, so below it nothing is exempt.
I do not get HRA. Can I still claim something?
Not through this route, which needs HRA in your salary. A separate deduction exists for people who pay rent but get no HRA, with its own much smaller limits, and it is also an old-regime deduction. Check it with a tax adviser.
Is what I type here sent anywhere?
No. The calculation runs in your browser. Only the year, city and whether you chose monthly or yearly are remembered on your device; your salary and rent are not.
Last reviewed: 19 September 2026