On ₹60,000/month Basic with ₹30,000/month HRA and ₹25,000/month rent in a metro city, this calculator's worked example exempts ₹2,28,000/year from tax under the Old Regime, saving roughly ₹63,024 in income tax. Enter your own Basic, HRA, and rent below for your exact exemption.
Formula
Least of 3
actual HRA, city %, rent - 10% Basic
Metro limit
50% of Basic
Delhi, Mumbai, Kolkata, Chennai
Non-metro limit
40% of Basic
every other city
Applies under
Old Regime only
New Regime disallows it
From your payslip or offer letter's salary breakup.
Typically 40-50% of Basic in most offer letters.
City type
Used only to estimate Old Regime tax saved from the exemption — doesn't affect the exemption amount itself.
HRA exemption you can claim (Old Regime)
₹2,28,000
₹19,000/month · binding factor: Rent paid minus 10% of Basic
Estimated tax saved (Old Regime)
₹63,024/yr
Taxable portion of HRA
₹1,32,000
HRA exemption is the least of these three amounts
| Actual HRA received | ₹3,60,000 |
| 50% of Basic (metro) | ₹3,60,000 |
| Rent paid minus 10% of Basic(lowest — this wins) | ₹2,28,000 |
| HRA exemption (annual) | ₹2,28,000 |
HRA exemption under Section 10(13A) of the Income-tax Act, 1961 only applies under the Old Regime — the New Regime disallows this and most other Chapter VI-A claims, so switching regimes changes whether this exemption is worth anything at all. The exemption is the least of the three amounts shown above; the rest of your HRA received is fully taxable as salary income. Tax saved is estimated by comparing FY 2026-27 Old Regime tax with and without this exemption applied as a deduction, using the gross annual salary you entered. For a full CTC-to-in-hand breakdown including EPF, gratuity, and professional tax, use the India CTC Calculator. For precise figures, check your actual salary structure or consult a chartered accountant.
HRA (House Rent Allowance) is the part of your salary structure most likely to have unused tax-saving potential, but the exemption formula isn't simply "whatever HRA I received." Section 10(13A) caps the exemption at the smallest of three separate amounts, and most people only find out which one binds them after the fact.
The first amount is straightforward: actual HRA received, exactly as shown on your payslip. The second is a percentage of your Basic salary, 50% if you live in one of four metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% everywhere else, including high-cost tech hubs like Bengaluru, Hyderabad, and Gurugram that don't qualify for the higher rate despite comparable rents. The third is rent paid for the year minus 10% of Basic, which means low rent relative to Basic can zero out your exemption even if HRA received and the city percentage are both generous.
Whichever of the three is lowest becomes your exempt amount; anything above that in your HRA received stays fully taxable. And critically, none of this matters at all under the New Regime, which disallows the exemption entirely, so the calculation only changes your actual tax bill if you file under the Old Regime with documented rent receipts.
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HRA exemption under Section 10(13A) of the Income-tax Act, 1961 is the LEAST of three amounts: (1) actual HRA received from your employer, (2) 50% of Basic salary if you live in a metro city (Delhi, Mumbai, Kolkata, or Chennai) or 40% of Basic in a non-metro city, and (3) rent paid for the year minus 10% of Basic salary. Whichever of these three is smallest becomes your exempt amount; the rest of your HRA received is fully taxable as salary income.
No. The New Regime, the default since FY 2023-24, disallows the HRA exemption along with most other Chapter VI-A deductions (Section 80C, 80D, and others). HRA exemption is only available if you actively choose the Old Regime when filing. If your only significant deduction is HRA, run both regimes through this site's India Take-Home Calculator to see which actually nets more for your specific numbers before assuming the Old Regime is worth switching to.
Yes. To claim HRA exemption you need valid rent receipts, and if your annual rent exceeds ₹1,00,000 (roughly ₹8,333/month), you also need your landlord's PAN on the declaration submitted to your employer. Without documentation, most employers won't reflect the exemption in your Form 16, and you'd need to claim it directly when filing your return instead, along with proof if the assessing officer asks.
Only four cities qualify for the 50%-of-Basic metro limit: Delhi, Mumbai, Kolkata, and Chennai. Every other city in India, including Bengaluru, Hyderabad, Pune, and Gurugram despite their high rents and tech-hub status, falls under the 40%-of-Basic non-metro limit. This classification hasn't been updated to reflect current cost of living, which is a common source of confusion for tech workers in Bengaluru or Gurugram who assume they qualify for the metro rate.
You can't claim HRA exemption if you don't pay rent, since the formula's third leg (rent paid minus 10% of Basic) would be zero or negative, making your exemption zero regardless of how much HRA you receive. If you own the home you live in, HRA exemption isn't available at all; homeowners have a separate deduction path instead, for home loan interest under Section 24(b), which this calculator doesn't model.
It depends entirely on your marginal tax bracket and how large your exemption is relative to income. In this calculator's worked example (₹7.2L Basic, ₹3.6L HRA received, ₹3L rent paid, metro city, on a ₹12L gross salary), the exemption comes to ₹2,28,000, saving approximately ₹63,024 in Old Regime tax for the year. Enter your own numbers below for your exact figure.
Related reading & tools
Go deeper on the full CTC breakdown, New vs Old Regime, and the rest of your salary structure.
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