For HRA calculation income tax law takes the lowest of three figures: the HRA you actually received, the rent you paid minus 10% of your salary, and 50% of salary in a metro city or 40% elsewhere. That lowest figure is exempt and the rest of your HRA is taxed with your salary.
The exemption under section 10(13A) is open only to salaried people who pay rent and choose the old regime. Here, salary means basic pay plus dearness allowance that counts for retirement benefits, plus commission fixed as a share of turnover. The calculator below does the three way comparison for you.
Quick facts
Law for FY 2025-26
Section 10(13A) and rule 2A, 1961 ActRegime
Old regime onlyMetro rate
50% of salaryOther cities
40% of salaryMetro list, FY 2025-26
Delhi, Mumbai, Kolkata, ChennaiAdded for tax year 2026-27
Bengaluru, Hyderabad, Pune, AhmedabadLandlord PAN
Needed when yearly rent is above ₹1,00,000
How the HRA calculator works
Type in your yearly basic plus DA, the HRA your employer paid, the rent you paid and whether you live in a metro city. The tool shows each of the three limits side by side, marks the lowest, and splits your HRA into the exempt part and the taxable part. Carry the taxable part into your salary total, then run the full tax calculator. The calculation runs in your browser; nothing is sent or stored.
If you moved house or your rent changed mid year, run it once for each period and add the results, since the law works the limits for the months in which you actually paid rent.
The three limits under section 10(13A) of income tax act
| Limit | How to work it out |
|---|---|
| 1. Actual HRA received | As shown in your salary slips for the rent period |
| 2. Rent paid minus 10% of salary | Yearly rent less one tenth of basic plus DA |
| 3. Share of salary | 50% of salary in a metro city, 40% anywhere else |
| City | FY 2025-26 | Tax year 2026-27 |
|---|---|---|
| Delhi, Mumbai, Kolkata, Chennai | 50% | 50% |
| Bengaluru, Hyderabad, Pune, Ahmedabad | 40% | 50% |
| All other places | 40% | 40% |
The four cities were added as metros by the Income-tax Rules, 2026, so the change helps only from tax year 2026-27. For FY 2025-26, a tenant in Pune or Bengaluru still uses 40%.
HRA calculation income tax example, step by step
Anita works in Pune. Basic plus DA ₹50,000 a month (₹6,00,000 a year). HRA ₹25,000 a month (₹3,00,000). Rent ₹30,000 a month (₹3,60,000).
- Actual HRA: ₹3,00,000.
- Rent minus 10% of salary: ₹3,60,000 minus ₹60,000 = ₹3,00,000.
- For FY 2025-26, 40% of salary: ₹2,40,000. Lowest figure ₹2,40,000 is exempt; ₹60,000 is taxable.
- For tax year 2026-27, Pune is a metro, so 50% of salary is ₹3,00,000. All three limits are ₹3,00,000, so the full HRA is exempt and nothing is taxable.
The same salary and rent give ₹60,000 more exemption from tax year 2026-27 purely because of the city change.
Who can claim and who cannot
- Can claim: a salaried employee who gets HRA, pays rent for the home they live in, and files under the old regime.
- Cannot claim: anyone in the new regime; anyone who lives in their own house; anyone who pays no rent.
- Rent to parents: allowed if the parent owns the home, really receives the rent and shows it in their own return.
- No HRA in salary: self employed people and employees without HRA may look at section 80GG instead.
- Home loan in another city: HRA for your rented home and home loan interest on a house elsewhere can both be claimed.
How to claim HRA if not mentioned in Form 16
If you forgot to give rent proof to your employer, the HRA will show as fully taxable in Form 16. You can still claim the exemption yourself in your return.
- Work out the exempt HRA with the calculator above.
- Start a fresh return under the old regime once you have signed into the e-filing portal.
- In the salary schedule, under allowances exempt under section 10, choose section 10(13A) and enter the exempt amount.
- Check that taxable salary drops by the same figure and that the tax or refund changes.
- Keep rent receipts, the rent agreement and the landlord's PAN, in case the processing centre asks for them.
Next time, give your employer the declaration in Form 12BB for FY 2025-26, or Form 124 for tax year 2026-27, so TDS reflects the exemption.
Other tools and guides here
| Guide | Use it for |
|---|---|
| Income tax calculator | Total tax under both regimes from your income and deductions |
| Capital gains tax | Rates on gains from shares, funds and property |
| Section 54 and 54F | Reinvesting a sale gain in a house |
| Depreciation rates | Write off rates for business assets |
| Gratuity tax | Exempt gratuity and leave pay at retirement |
HRA errors and fixes
| Problem | Fix |
|---|---|
| Claiming HRA in the new regime | Exemption is lost; compare regimes before choosing |
| Taking 10% of gross salary instead of basic plus DA | Use only basic, retirement DA and turnover commission |
| Rent above ₹1 lakh a year with no landlord PAN | Collect the PAN, or a declaration if the landlord has none |
| Using 50% for Pune in FY 2025-26 | The 50% rate for the four new cities starts in tax year 2026-27 |
The calculator and rules shown are general, and your employer's salary structure can change the result. Use them as a guide, then confirm with a chartered accountant or the e-filing portal's help section before claiming.
Sources we checked
- Income-tax Act, 1961, section 10(13A)
- Income-tax Rules, 1962, rule 2A
- Income-tax Rules, 2026 (HRA metro cities)
Frequently asked questions
What does section 10(13A) of the Income Tax Act cover?
It is the provision that exempts part of the house rent allowance paid to a salaried employee who lives in rented housing. The exempt amount is the lowest of three limits, worked out under rule 2A.
How is HRA calculated for income tax?
Take the lowest of the actual HRA, rent paid minus 10% of salary, and 50% of salary in a metro or 40% elsewhere. Salary means basic plus retirement DA plus turnover commission.
Is HRA exempt in the new tax regime?
No. HRA exemption can be claimed under the old regime alone. In the new regime the whole HRA is taxable.
Are Bengaluru and Hyderabad metro cities for HRA?
From tax year 2026-27, yes, along with Pune and Ahmedabad, as the Income-tax Rules, 2026 now list them. Returns for FY 2025-26 still apply 40% there.
Can I claim HRA if it is not in my Form 16?
Yes. Enter the exempt amount under section 10(13A) in your return's salary schedule and keep rent proof ready.