How is HRA exemption calculated?

HRA exemption under Section 10(13A) is the least of three amounts: (1) the actual HRA received, (2) rent paid minus 10% of basic salary, and (3) 50% of basic in a metro city or 40% in a non-metro city.

Which cities count as metro for HRA?

Only Delhi, Mumbai, Kolkata and Chennai are treated as metros (50% of basic). Every other city, including Bengaluru, Hyderabad and Pune, is non-metro (40% of basic) for HRA.

Can I claim HRA in the new tax regime?

No. The HRA exemption is available only in the old tax regime. If HRA is a big part of your pay, compare both regimes before choosing.

What documents do I need for HRA?

Keep rent receipts and a rent agreement. If your annual rent exceeds 1,00,000, you must also report the landlord’s PAN.

Can I claim HRA and a home loan together?

Yes, if you genuinely pay rent (for example, you rent where you work and own a home elsewhere). You can claim HRA on the rent and home-loan interest under Section 24(b) in the old regime.

HRA Exemption Calculation (FY 2026-27)

Updated for FY 2026-27 · illustrative, not financial advice

Short answer: your HRA exemption (Section 10(13A), old regime only) is the least of three figures: the actual HRA you receive, your annual rent minus 10% of basic, and 50% of basic (metro) or 40% (non-metro). Theplanner’s old-regime page computes it from your rent and city automatically.

The formula

Exempt HRA = the lowest of:

Actual HRA received from your employer.
Rent paid − 10% of basic salary (for the year).
50% of basic if you live in a metro, or 40% of basic otherwise.

Basic here means basic salary (plus DA if your pay has it). Metros = Delhi, Mumbai, Kolkata, Chennai.

Worked example

Basic ₹7,00,000/yr, rent ₹30,000/month (₹3,60,000/yr), metro city:

Rent − 10% of basic = ₹3,60,000 − ₹70,000 = ₹2,90,000
50% of basic (metro) = ₹3,50,000
Actual HRA received = say ₹3,00,000

The exemption is the least of these → ₹2,90,000. In a non-metro, the 40% cap (₹2,80,000) would apply instead.

HRA is old-regime only

The new regime does not allow HRA. So if you pay significant rent, the old regime can become cheaper. Compare old vs new with your numbers before you decide. In the planner, switch to the old regime and enter your monthly rent and city; it applies the least-of-three rule for you.

Documents to keep

Rent receipts and a rent agreement.
Landlord’s PAN if your annual rent is more than ₹1,00,000.

Frequently asked questions

How is HRA exemption calculated?: HRA exemption under Section 10(13A) is the least of three amounts: (1) the actual HRA received, (2) rent paid minus 10% of basic salary, and (3) 50% of basic in a metro city or 40% in a non-metro city.
Which cities count as metro for HRA?: Only Delhi, Mumbai, Kolkata and Chennai are treated as metros (50% of basic). Every other city, including Bengaluru, Hyderabad and Pune, is non-metro (40% of basic) for HRA.
Can I claim HRA in the new tax regime?: No. The HRA exemption is available only in the old tax regime. If HRA is a big part of your pay, compare both regimes before choosing.
What documents do I need for HRA?: Keep rent receipts and a rent agreement. If your annual rent exceeds 1,00,000, you must also report the landlord’s PAN.
Can I claim HRA and a home loan together?: Yes, if you genuinely pay rent (for example, you rent where you work and own a home elsewhere). You can claim HRA on the rent and home-loan interest under Section 24(b) in the old regime.