Which cities count as metro for HRA?

From FY 2026-27, Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad are all treated as metro (50% of basic) — the list was expanded from the original four cities under the new Income Tax Act. Every other city uses the 40% figure, regardless of local rent levels or cost of living. Confirm which year's rules apply to your filing, since earlier years used only the original four-city list.

Do I need rent receipts to claim HRA?

Yes — your employer will usually ask for rent receipts, and for rent above ₹1,00,000 a year (about ₹8,333/month) your landlord's PAN is also required. Without this documentation, your employer may not apply the exemption when deducting TDS, even if you're genuinely entitled to it.

Can I claim HRA and a home loan deduction at the same time?

Yes, if you're renting in one city while owning a home (empty, rented out, or occupied by family) elsewhere, or if your own home isn't ready for possession yet. You generally can't claim HRA for rent paid on a home you also live in and claim a home loan deduction for.

What if I pay rent to a parent or relative?

It's allowed, provided it's genuine — a real rental agreement, actual rent transfers (not just a paper trail), and the relative declares the rent as income on their own return. Tax authorities scrutinise these arrangements more closely than rent paid to an unrelated landlord.

Does the new tax regime allow HRA exemption?

No — HRA exemption is only available under the old tax regime. Under the new regime, HRA received is fully taxable as salary, which is one of the specific trade-offs to weigh when comparing the two regimes if you pay significant rent.

Tax & salaryIndia only

HRA Calculator

Work out your tax-exempt HRA under Indian income tax rules — the lowest of three figures, not simply what you receive or pay in rent.

Basic salary (monthly)₹40,000

HRA received (monthly)₹20,000

Rent paid (monthly)₹18,000

City type

Tax-exempt HRA (monthly)

₹14,000

HRA received₹20,000

Rent − 10% of basic₹14,000

50% of basic₹20,000

Taxable HRA₹6,000

Illustrative only — only available under the old tax regime, and assumes you have valid rent receipts. Consult a tax professional for your actual return.

What is an HRA calculator?

House Rent Allowance is the part of a salaried employee's CTC paid specifically toward rent, and part of it can be exempt from income tax under the old tax regime. An HRA calculator works out exactly how much of your HRA is exempt — which, despite what many people assume, isn't simply "whatever HRA you receive" or "whatever rent you pay."

The exemption is deliberately the smallest of three figures, which means a generous HRA component in your salary doesn't guarantee a large exemption if your actual rent or basic salary don't support it.

How is HRA exemption calculated?

The exempt amount is the lowest of three figures:

Exempt HRA = min(HRA received, Rent paid − 10% of basic, 50% or 40% of basic)

For example, a ₹40,000 monthly basic salary with ₹20,000 HRA received and ₹18,000 rent paid, in a metro city: HRA received is ₹20,000; rent minus 10% of basic is ₹18,000 − ₹4,000 = ₹14,000; and 50% of basic is ₹20,000. The lowest of the three is ₹14,000 — not the full ₹20,000 HRA received, even though it might look that way at first glance. The remaining ₹6,000 of HRA is taxed as regular salary.

Benefits of claiming HRA correctly

Lower taxable income

A correctly claimed exemption directly reduces the salary income you're taxed on, under the old regime.

Clarity for regime choice

Knowing your real HRA exemption is one of the inputs that decides whether the old or new tax regime actually saves you more.

Avoids under- or over-claiming

Claiming the full HRA received when a lower figure applies risks a mismatch at assessment; claiming too little leaves a real deduction unused.

Useful for salary negotiation

Understanding how the HRA component is actually taxed helps evaluate whether a higher HRA or a higher basic salary serves you better.

LessonSalary Structuring & Tax — How to actually read a CTC breakup, and what in it genuinely changes your take-home pay.
CalculatorGST Calculator — Add GST to a base amount, or work it out of a GST-inclusive price.

Common questions

It's the lowest of three figures: the actual HRA you receive, your rent paid minus 10% of basic salary, or 50% of basic salary in a metro city (40% elsewhere) — not simply the rent you pay or the HRA you receive. Whichever of the three is smallest is what you can actually claim.