Calculate your House Rent Allowance (HRA) tax exemption instantly for FY 2025-26. Find out exactly how much HRA is tax-free under the old tax regime and optimize your rent claims.
The HRA exemption is the minimum of these three amounts:
1. Actual HRA Received
The HRA component in your salary as per pay slip
2. 50% / 40% of Basic Salary
50% for metro cities (Mumbai, Delhi, Chennai, Kolkata); 40% for others
3. Rent Paid minus 10% of Basic Salary
(Monthly Rent × 12) minus (10% × Annual Basic Salary)
HRA Exemption = MIN(HRA Received, 50%/40% of Basic, Rent - 10% of Basic)
Taxable HRA = HRA Received - HRA Exemption
Basic Salary
₹7,00,000 / year
HRA Received
₹3,00,000 / year
Monthly Rent Paid
₹25,000
City
Mumbai (Metro)
HRA (House Rent Allowance) is a component of salary provided by employers to help employees cover rental expenses. Under Section 10(13A) of the Income Tax Act, a portion of HRA is exempt from tax if you are living in rented accommodation.
HRA exemption is one of the most significant tax benefits for salaried employees in the old tax regime. For someone paying ₹20,000-30,000 in monthly rent in a metro city, the annual HRA exemption can be ₹2-3 lakh, resulting in tax savings of ₹40,000-90,000 depending on their tax bracket.
The new tax regime (default for FY 2025-26) does not allow HRA exemption. If you pay significant rent and receive substantial HRA, you should compare both regimes carefully. Our tax calculator helps you determine the regime that minimizes your total tax liability based on your actual HRA, rent, and other deductions.