Free tool
HRA Exemption Calculator (FY 2026-27)
The least of HRA received, rent minus 10% of basic, and 50% or 40% of basic. Old regime only. Estimates only. Rules checked 25 Oct 2026.
Exempt HRA a year (old regime)
₹2,40,000
Taxable HRA a year: ₹0
The exemption is the lowest of these three
HRA received
₹2,40,000
Lowest, so this is your exemption
Rent paid minus 10% of basic
₹2,40,000
50% of basic
₹3,00,000
- HRA received a year
- ₹2,40,000
- Exempt
- ₹2,40,000
- Taxable
- ₹0
HRA exemption is available only in the old tax regime. In the new regime all HRA is taxable.
How HRA exemption works
- If you pay rent and get HRA in your salary, part of that HRA can be tax-free under the old tax regime. The tax-free part is the lowest of three amounts for the year: the HRA you received, the rent you paid minus 10% of your basic + DA, and 50% of basic + DA in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad (40% in any other city).
- Example: basic + DA ₹40,000 a month, HRA ₹16,000 and rent ₹15,000 in Bengaluru. In a year: HRA received ₹1,92,000; rent minus 10% of basic ₹1,32,000; 50% of basic ₹2,40,000. The lowest is ₹1,32,000, so that much is tax-free and ₹60,000 of HRA is taxed.
- Only the months you actually paid rent count. If your rent or salary changed during the year, work out each period separately and add them up.
- In the new tax regime, which is the default, there is no HRA exemption and all of it is taxed. Check which regime leaves you more on our CTC calculator.
What to keep ready
- Rent receipts or bank transfer records for every month.
- Your rent agreement, if you have one.
- Your landlord's PAN if the rent is more than ₹1 lakh a year.
- You declare rent to your employer on Form 124, which replaced Form 12BB, so the right TDS is deducted.
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