HRA Calculator India FY 2026-27 — HRA Exemption Calculator for Income Tax
Calculate your exact HRA tax exemption using the min-of-three formula. Enter basic salary, actual HRA, and monthly rent — see exempt vs taxable HRA, tax saved, and PAN requirement instantly.
🏠 Min-of-3 Formula Applied Live📌 Metro: 50% of Basic | Non-Metro: 40%✅ Old Regime — Sec 10(13A)📋 PAN Required if Rent > ₹1L/yr📈 Tax Saved at Your Slab
HRA Exemption Calculator FY 2026-27
Your HRA Tax Exemption — Section 10(13A)
HRA exemption = Minimum of (a) Actual HRA received, (b) Rent paid − 10% of basic, (c) 50%/40% of basic. Only under Old Tax Regime.
🏠 Location & Tax Details
💼 Monthly Salary Components
₹50,000
₹5,000₹5,00,000
₹25,000
₹0₹3,00,000
₹18,000
₹0 (Own house / No rent)₹2,00,000
⚠ Annual rent > ₹1,00,000 — Landlord's PAN is mandatory to claim HRA exemption. Submit to employer's payroll.
📌 HRA exemption is available only under Old Tax Regime. Under New Tax Regime, entire HRA is part of taxable salary. If you haven't claimed HRA via employer, you can still claim it while filing ITR.
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📈 HRA Exemption Scenarios — How Much Can You Save?
Real-world HRA exemption examples at different salary levels. Green = exempt (tax-free), Red = taxable HRA portion. Tax saved at 30% slab (31.2% effective).
(a) ₹6,00,000 (b) ₹5,40,000−₹1,20,000=₹4,20,000 (c) 50%×₹12L=₹6,00,000 → Min = ₹4,00,000 (a) is actually lowest at ₹6L? No — recalc: min(6L, 4.2L, 6L) = ₹4,20,000 exempt | Tax saved = ₹4.2L×31.2% = ₹1,31,040
Basic ₹50K/mo | HRA ₹20K | No Rent (Own House)₹0 Exempt
Taxable: ₹2,40,000 (full HRA taxable)
(b) Rent paid = ₹0 → ₹0 − ₹60,000 = negative → effectively ₹0 → Min = ₹0. If you don't pay rent, entire HRA is taxable.
📋 HRA Exemption Reference Table — FY 2026-27
Quick reference: monthly HRA exempt amount at different basic salary and rent combinations for metro cities (50% rule). Tax saved shown at 30% slab.
Monthly Basic
HRA Recd/mo
Rent Paid/mo
Annual HRA Exempt
Annual Taxable HRA
Tax Saved @ 30%
₹20,000
₹10,000
₹8,000
₹72,000
₹48,000
₹22,464
₹30,000
₹15,000
₹12,000
₹1,08,000
₹72,000
₹33,696
₹40,000
₹20,000
₹15,000
₹1,32,000
₹1,08,000
₹41,184
₹50,000
₹25,000
₹18,000
₹1,56,000
₹1,44,000
₹48,672
₹60,000
₹30,000
₹22,000
₹1,98,000
₹1,62,000
₹61,776
₹80,000
₹40,000
₹28,000
₹2,40,000
₹2,40,000
₹74,880
₹1,00,000
₹50,000
₹35,000
₹3,00,000
₹3,00,000
₹93,600
₹1,50,000
₹75,000
₹50,000
₹4,20,000
₹4,80,000
₹1,31,040
Metro cities (50% rule): Delhi, Mumbai, Chennai, Kolkata. For non-metro (40% rule), the exempt amount is lower. Calculations use min-of-three formula. Tax saved = Exempt HRA × 31.2% (30% slab + 4% cess). PAN of landlord mandatory if annual rent exceeds ₹1,00,000. HRA exemption only under Old Tax Regime (Section 10(13A)).
🏠 Metro vs Non-Metro for HRA — Which Cities Get 50%?
Only 4 cities are classified as "metro" for HRA exemption purposes under Income Tax. Bengaluru and Hyderabad are NOT metro — a common misconception.
⚠ Common Mistake: Many taxpayers in Bengaluru and Hyderabad claim 50% of basic as HRA ceiling — this is incorrect. Both cities are non-metro and the ceiling is 40% of basic. If you've been claiming 50%, your HRA exemption was overstated and you may have underpaid tax. Correct this in your current year ITR.
💡 4 Smart HRA Tax-Saving Strategies for FY 2026-27
Maximise your HRA exemption legally — and avoid the common mistakes that trigger notices.
🏠
Pay Rent to Parents — Legally Claim HRA
If you live with your parents who own the house, you can pay them rent and claim HRA exemption — as long as: (1) your parents own the property, (2) rent is actually transferred by bank/UPI (not cash), (3) your parents declare it as rental income in their ITR, and (4) there is a rent agreement. Your parents (likely in lower tax slab) pay tax on rental income; you save at your 30% slab — a net family tax benefit. Only for parents — not spouse. Annual rent ₹96,000 (₹8,000/month) avoids PAN requirement.
📋
Keep Rent Just Under ₹8,333/Month to Avoid PAN
Landlord's PAN is mandatory if annual rent exceeds ₹1,00,000 (₹8,333/month). If your landlord is reluctant to share PAN, structure rent at ₹8,000/month — annual rent ₹96,000, no PAN needed, full HRA exemption claimable. On basic ₹50,000/month: (b) = ₹96,000 − ₹60,000 = ₹36,000 exempt. Modest but zero-friction. Or simply get landlord PAN and maximise rent claim — the tax saving is worth the minor inconvenience.
📈
Claim HRA + Home Loan Interest Simultaneously
You can claim both HRA exemption AND home loan interest deduction under Sec 24b if your owned property is in a different city from where you work (or is under construction). Example: You own a flat in Pune (home loan interest ₹2L deductible), but work and rent in Mumbai (HRA ₹1.8L exempt). Combined tax saving = ₹3.8L × 31.2% = ₹1,18,560/year. Even in the same city, courts have allowed dual claims in specific circumstances — consult a CA for your situation.
🚫
Don't Claim HRA Without Proof — It Attracts Notices
CBDT cross-checks HRA claims against 26AS data, AIS, and property databases. Claiming HRA without genuinely paying rent or with inflated rent receipts is tax fraud. Specifically: (1) You must actually live in a rented house, (2) Rent receipts must match bank transactions, (3) Your landlord's rental income must appear in their ITR, (4) Fake rent agreements with relatives (especially spouse) are specifically flagged. Penalty: 50–200% of tax evaded + interest. The exemption is generous — use it legitimately, not fraudulently.
❓ HRA Calculator — Frequently Asked Questions
Most searched HRA exemption questions for India FY 2026-27 — answered with exact formula steps.
HRA exemption = Minimum of these three amounts:
(a) Actual HRA received = Monthly HRA × 12 (b) Rent paid − 10% of basic = (Monthly rent × 12) − (10% × Annual basic) (c) City ceiling = 50% of Annual basic (metro: Delhi, Mumbai, Chennai, Kolkata) OR 40% of Annual basic (all other cities)
These get 50% of basic salary as the HRA ceiling (condition c).
❌ NOT metro (40% ceiling applies):
Bengaluru, Hyderabad, Pune, Ahmedabad, Jaipur, Lucknow, Surat, Kochi, Chandigarh, and all other cities.
This is one of the most common HRA mistakes — employees in Bengaluru and Hyderabad frequently claim 50% instead of 40%, overstating exemption.
Yes — if you genuinely pay rent to your parents and follow these rules:
✅ Your parents must own the property (not you or your spouse)
✅ Rent must be actually paid by bank transfer / UPI — not cash (though cash is not explicitly banned, digital proof is essential)
✅ A proper rent agreement must exist
✅ Your parents must declare rental income in their ITR (Income from House Property)
✅ If annual rent > ₹1 lakh, provide parents' PAN to employer
❌ NOT allowed: Paying rent to your spouse — specifically disallowed by Income Tax tribunals and courts. Husband-wife rent arrangement to claim HRA is rejected.
Net family benefit: You save tax at 30% slab; parents pay tax at their (usually lower) slab — typically 0% or 5% if their income is low.
No — HRA exemption is NOT available under the New Tax Regime.
Under the New Tax Regime for FY 2025-26 (AY 2026-27):
• HRA received from employer is fully included in taxable salary
• Section 10(13A) exemption does not apply
• Only standard deduction ₹75,000 and employer NPS 80CCD(2) are available
Impact: If you receive ₹25,000/month HRA = ₹3,00,000/year — this entire amount is taxable under new regime vs potentially ₹1,56,000 taxable under old regime (with ₹1,44,000 exempt). At 30% slab: switching from old to new regime costs you ₹44,928 extra tax just on the HRA component.
This is why employees in metro cities with significant HRA and genuine rent payments often still prefer the Old Regime despite its complexity.
Documents needed for HRA claim:
From employer (for TDS reduction):
• Rent receipts (monthly) — stamped if rent > ₹5,000/month
• Rent agreement (with landlord name, address, rent amount, period)
• Landlord's PAN — mandatory if annual rent > ₹1,00,000
• Self-declaration that you are paying rent and living in the house
For ITR filing:
• No documents to upload — but keep all above in records for 6 years
• Report HRA exemption under "Exempt Income" section
• If claiming more than employer allowed, compute yourself using Form 10BA declaration
Form 10BA: Required if HRA exceeds ₹3,000/month (₹36,000/year). A self-declaration stating you don't own a house in the same city. Submit to employer once a year.
Yes — in these situations you can claim both HRA and home loan deduction simultaneously:
1. Property in different city: You own a house in Pune (home loan interest ₹2L deductible under Sec 24b) but work and rent in Mumbai (HRA exempt). Both claims fully valid — no restriction.
2. Property under construction: You've bought a flat (paying home loan interest) but it's not ready for possession — you live in a rented house. HRA claim valid during construction period.
3. Same city — grey area: Courts have allowed this in specific cases with valid reasons (property not ready, distance from work location, etc.) — but it's subject to scrutiny. Get a CA opinion.
Only under Old Tax Regime. Combined saving: ₹2L home loan interest + ₹1.8L HRA exempt = ₹3.8L deduction = ₹1,18,560 tax saved at 30% slab.
If you forgot to submit rent receipts to employer or joined mid-year, your employer may have over-deducted TDS without HRA exemption. Steps to recover:
Step 1: Calculate your actual HRA exemption using the min-of-three formula (use this calculator). Step 2: File your ITR (ITR-1 or ITR-2 for salaried) and report HRA exemption under Section 10(13A) in the Exempt Income schedule. Step 3: The ITR system will recalculate your actual tax, and the excess TDS will be refunded to your bank account (typically within 30–60 days of ITR processing).
You can claim HRA exemption in ITR even if not claimed via employer. Keep rent receipts, rent agreement, and landlord PAN (if rent > ₹1L) in your records — these may be required if the ITR is selected for scrutiny.
🏠 Maximise Your HRA & Salary Tax Savings
HRA is one of the largest tax-saving components for salaried employees — but most people either under-claim it or lose it entirely by choosing the wrong regime. Vikash Royal will review your salary structure, HRA, home loan, and deductions to build a personalised tax plan that maximises your monthly take-home legally. SEBI-Registered. ARN: ARN-356458
