HRA Exemption Calculator FY 2026-27 (8 Metro Cities at 50%)
Find out how much of your House Rent Allowance is tax-free and how much is taxable. Uses the least-of-three rule, the new list of eight 50% cities from 1 April 2026, and works with monthly or yearly figures.
Your salary and rent
Count DA only if it forms part of retirement benefits (your salary slip or HR can confirm). Most private-sector salaries have no DA.
More options
Only commission fixed as a percentage of the sales you achieve counts as salary for HRA. Leave 0 if you have none.
Your HRA exemption
The exemption is the lowest of these three amounts:
- Actual HRA received
- Rent paid minus 10% of salary
- 50% of salary
How to use this HRA calculator
- Pick the financial year and the city where your rented home is.
- Choose whether you will enter monthly or yearly figures.
- Enter your basic salary, DA (if it counts for retirement benefits), the HRA your employer pays and the rent you pay.
- If you paid rent for only part of the year, enter the number of months. In monthly mode the calculator multiplies all amounts by these months.
- Read the tax-free HRA, the taxable part and which of the three limits applied. The tips below the result show the rent at which you get the full benefit.
HRA exemption formula
The tax-free part of HRA is the lowest of these three amounts, worked out for the period you lived in a rented home:
2. Rent paid − 10% of salary
3. 50% of salary in the eight listed cities, 40% elsewhere
Here salary means basic salary + DA (where it forms part of retirement benefits) + commission based on a fixed percentage of turnover. Other allowances, bonus and perquisites are left out. Whatever is left of your HRA after the exemption is added to your taxable salary.
Which cities get 50% HRA exemption from 2026?
From FY 2026-27 (from 1 April 2026), the Income-tax Rules, 2026 extend the 50% limit to eight cities:
| City | FY 2025-26 | FY 2026-27 onwards |
|---|---|---|
| Delhi, Mumbai, Kolkata, Chennai | 50% | 50% |
| Bengaluru, Hyderabad, Pune, Ahmedabad | 40% | 50% |
| All other cities and towns | 40% | 40% |
The rule names cities, so nearby places such as Gurugram, Noida, Thane or Navi Mumbai are not on the list on their own. Check with your employer if your home is on a city boundary.
What the change means in Bengaluru: basic salary ₹12,00,000 a year, HRA ₹6,00,000, rent ₹7,20,000. In FY 2025-26 the 40% limit (₹4,80,000) applied, so ₹4,80,000 was tax-free. In FY 2026-27 the limit rises to 50% (₹6,00,000), and the tax-free HRA becomes ₹6,00,000, which is ₹1,20,000 more. At a 30% slab that saves about ₹37,440 in tax.
HRA exemption examples (FY 2026-27, yearly)
Basic salary ₹6,00,000 a year (no DA), HRA ₹3,00,000 a year:
| Yearly rent | Metro (50%) | Other city (40%) |
|---|---|---|
| ₹60,000 | ₹0 | ₹0 |
| ₹1,80,000 | ₹1,20,000 | ₹1,20,000 |
| ₹3,00,000 | ₹2,40,000 | ₹2,40,000 |
| ₹3,60,000 | ₹3,00,000 | ₹2,40,000 |
| ₹4,80,000 | ₹3,00,000 | ₹2,40,000 |
Documents you need to claim HRA
- Rent receipts or a rent agreement, and proof that you paid the rent (bank transfer or UPI records are best).
- Landlord’s PAN if your rent is more than ₹1,00,000 a year. Employers have asked for it for years, and you should keep it ready.
- Investment declaration to your employer. From April 2026, Form 124 replaces Form 12BB. It also asks how you are related to the landlord.
- If your employer did not allow the exemption, you can still claim it when you file your return under the old regime, as long as you have the proof.
Related tools
Income Tax Calculator FY 2026-27 · Gratuity Calculator · PPF Calculator · 8th Pay Commission Salary Calculator
Frequently asked questions
How is HRA exemption calculated?
The exemption is the lowest of (1) the HRA you received, (2) rent paid minus 10% of basic + DA, and (3) 50% of basic + DA in the eight listed cities or 40% elsewhere. With basic ₹50,000 a month, HRA ₹20,000 and rent ₹25,000 in Pune for FY 2026-27, the limits are ₹20,000, ₹20,000 and ₹25,000, so ₹20,000 a month is tax-free.
Is Bengaluru a metro city for HRA?
Yes, from FY 2026-27. Bengaluru, Hyderabad, Pune and Ahmedabad now get the 50% limit along with Delhi, Mumbai, Kolkata and Chennai. For FY 2025-26 and earlier years, they were treated as non-metro (40%).
Can I claim HRA in the new tax regime?
No. The HRA exemption is available only if you choose the old tax regime. In the new regime the whole HRA is taxable.
Can I claim HRA if I pay rent to my parents?
Yes, if the rent is real: there should be a rent agreement, regular payments through the bank, and your parent should show the rent as income in their return. Rent paid to your spouse is usually not accepted. Form 124 asks you to disclose your relationship with the landlord.
What if my rent is less than 10% of my salary?
Then “rent minus 10% of salary” is zero or negative, so the exemption is zero and all of your HRA is taxable.
Can I claim HRA and a home loan deduction together?
Yes, if you live on rent in one city and own a house elsewhere, or if your own house is far from your workplace and you genuinely live on rent. Keep proof of both.
Is landlord PAN mandatory for HRA?
Your employer will ask for the landlord’s PAN if your rent is more than ₹1,00,000 a year. If the landlord has no PAN, a signed declaration from the landlord is usually accepted.
Does HRA exemption apply if I live in my own house?
No. You must actually pay rent for the home you live in. If you live in your own house, the full HRA is taxable.
Rules as of October 2026, under the Income-tax Act, 2025 and the Income-tax Rules, 2026. This calculator gives an estimate; your employer’s payroll and your tax return decide the final figure.