Income Tax Calculator
Use your HRA exemption figure here to compare Old vs New regime and find your total tax liability.
Calculate now →HRA Exemption Calculator — Section 10(13A)
Calculate exactly how much of your House Rent Allowance is tax-free using the three-condition rule, with full working shown. Covers FY 2025-26 and FY 2026-27 including the new 8-city metro list.
🏠 Your Details
Enter monthly or annual figures — use the toggle to switch. All amounts in rupees.
📊 Your HRA Exemption
Fill in your details and click Calculate to see your exempt and taxable HRA.
Your results will appear here once you calculate.
How HRA Exemption Is Calculated
A plain-English walkthrough of the three-condition rule under Section 10(13A).
1
Determine your "Salary" for HRA purposes
"Salary" for HRA is not your full CTC or gross pay — it's specifically Basic Salary plus Dearness Allowance (only the portion that forms part of retirement benefits) plus any commission paid as a fixed percentage of turnover. Most private-sector employees have zero DA, so their HRA Salary = Basic only.
HRA Salary = Basic Salary + Qualifying DA + Commission (fixed % of turnover)
2
Compute all three conditions
The law specifies three separate upper limits. You can't choose the most favourable one — the rule forces you to take the minimum of all three.
Condition 1 = Actual HRA received from employer
Condition 2 = 50% × Salary (metro) or 40% × Salary (non-metro)
Condition 3 = Rent paid − 10% × Salary (minimum zero)
3
Take the minimum — that's your exempt HRA
Whichever of the three conditions gives the lowest figure is your tax-exempt HRA. Any HRA received above that amount is added back to your taxable salary income.
Exempt HRA = MIN(Condition 1, Condition 2, Condition 3)
4
Determine metro vs non-metro status carefully
For FY 2025-26 only four cities qualify for the 50% rate: Delhi, Mumbai, Kolkata, and Chennai. From FY 2026-27 onwards, Bengaluru, Hyderabad, Pune, and Ahmedabad join the list. This is the single most common error — people in Bengaluru or Pune often assume they get 50%, but for FY 2025-26 they are still non-metro at 40%.
Why is this calculation method used?
The three-condition minimum rule under Section 10(13A) read with Rule 2A is designed to ensure the exemption reflects actual rental expenditure, not just what your employer chose to label as HRA. Condition 1 caps it at what you actually receive. Condition 2 caps it as a proportion of salary. Condition 3 caps it at what you actually spend on rent, net of the first 10% of salary which is considered the taxpayer's own contribution. The minimum ensures none of these limits is exceeded.
Tax rules applied
Section 10(13A) of the Income Tax Act, 1961 (now recodified as Section 21(2) of the Income Tax Act, 2025 effective from 1 April 2026) provides the exemption. Rule 2A of the Income Tax Rules, 1962 specifies the three-condition calculation formula. The metro city list is defined in Rule 2A(1)(a). The PAN-of-landlord requirement applies under Rule 26C if annual rent exceeds ₹1,00,000. This exemption is not available under the New Tax Regime per Section 115BAC.
Important assumptions
This calculator assumes you are a salaried individual receiving HRA from your employer and paying rent for a house you live in but do not own. It assumes the DA you enter qualifies for retirement benefits. It assumes the city you select is your actual place of residence during the year. If you changed cities or rent amounts mid-year, calculate each period separately and add the results. Self-employed individuals cannot claim HRA under Section 10(13A) but may claim under Section 80GG (old regime only, capped at ₹60,000 per year).
This is an estimate, not tax advice.
HRA exemption depends on your specific salary structure, proof of rent paid, and whether you're under the Old or New Tax Regime. If your annual rent exceeds ₹1,00,000, your landlord's PAN is mandatory. Please consult a qualified chartered accountant before claiming HRA in your ITR.
Tax Rules Reference
- Section 10(13A) — HRA exemption provision
- Rule 2A, Income Tax Rules, 1962 — three-condition formula and metro city definition
- Income Tax Rules, 2026 — expanded 8-city metro list effective FY 2026-27
- Income Tax Department of India — official site
Frequently Asked Questions
Common questions about HRA exemption and the three-condition rule.
Which cities are considered metro for HRA in FY 2025-26?
For FY 2025-26, only four cities qualify as metro under Rule 2A: Delhi, Mumbai, Kolkata, and Chennai. Residents get 50% of salary as the Condition 2 limit. All other cities — including Bengaluru, Hyderabad, Pune, and Ahmedabad — are treated as non-metro at 40% for FY 2025-26. From FY 2026-27, those four cities join the metro list.
Is HRA exemption available under the New Tax Regime?
No. HRA exemption under Section 10(13A) is only available if you opt for the Old Tax Regime. Under the New Regime (default from FY 2023-24), the entire HRA received is part of your taxable salary with no exemption. If your HRA is significant, this is often a key reason to stay on the Old Regime.
Can I claim HRA if I pay rent to my parents?
Yes, provided the house is owned by your parents and they declare the rent as income in their ITR. The arrangement must be genuine with a proper rent agreement and rent paid via bank transfer. Paying rent to a spouse is generally not allowed as it is not considered a bona fide landlord-tenant arrangement.
What is the three-condition HRA rule?
The exempt HRA is the lowest of: (1) Actual HRA received from your employer, (2) 50% of Salary for metro residents or 40% for non-metro, and (3) Rent actually paid minus 10% of Salary. Here Salary = Basic + qualifying DA + qualifying commission. The smallest of these three is tax-free; the rest is taxable.
What if my rent is less than 10% of my basic salary?
Then Condition 3 becomes zero — and since the exemption is the minimum of all three conditions, your entire HRA exemption is zero. This means you receive HRA from your employer but it's all taxable. To claim any exemption, your rent must exceed 10% of your basic salary (more precisely, 10% of Basic + DA + qualifying commission).
When does the 8-city metro list apply?
The expanded list adding Bengaluru, Hyderabad, Pune, and Ahmedabad applies from FY 2026-27 onwards under the Income Tax Rules, 2026. For FY 2025-26 ITR (due July 2026), only the original four cities qualify for 50%. Do not apply the new list to FY 2025-26 returns — it's a common and potentially costly mistake.