HRA calculator — how much of your rent is actually tax-free?
HRA exemption is the LEAST of three values under sec 10(13A). Most calculators just show the answer; we show which of the three rules is limiting you and what documentation you'll need if the IT department asks. Old-regime only — new regime taxes HRA in full.
Your monthly salary inputs
Metro = Delhi, Mumbai, Chennai, Kolkata only. Bengaluru + Hyderabad are non-metro for HRA purposes.
The least-of-three calculation
HRA exemption is the LEAST of these three. Whichever is smallest is what you actually save on taxes.
- Actual HRA received
- ₹3,00,000
- 50% of basic salary
- ₹3,00,000
- Rent paid − 10% of basic
- ₹3,00,000
Limiting factor: % of basic. This is the bucket capping your exemption — raise this if possible to get more tax relief.
Documentation you need
- • Rent receipts for at least 3 months (more if possible)
- • Landlord's PAN if annual rent > ₹1 lakh (non-negotiable per CBDT)
- • Rent agreement (helps during scrutiny)
- • Bank statement showing rent transfer (avoids cash-payment objections)
The three HRA rules, explained
- Actual HRA received.Cap 1 — you can't claim more than what was actually paid to you as HRA.
- 50% of basic salary (metro) or 40%(non-metro). Cap 2 — the IT department decided that regardless of actual rent or HRA, exemption shouldn't exceed half (or 40%) of basic. Metro = Mumbai, Delhi, Chennai, Kolkata. Bengaluru + Hyderabad are NOT metros for HRA purposes.
- Rent paid − 10% of basic salary. Cap 3 — the part of rent that exceeds 10% of basic. This is the most commonly-limiting rule for people with low basic salaries but high rents.
The system takes the LEAST of all three. That's your tax-free HRA. Anything above that is added to taxable income at your slab rate.
Specific situations
- Living with parents? Pay them rent via bank transfer. They declare it as income (if any tax due). You claim HRA. Rent must be genuine — CBDT has flagged sham-rent cases.
- Own a house but work elsewhere? You can claim HRA for rented accommodation AND interest deduction (sec 24) on the home loan for the owned property. Very common dual-benefit.
- Work from home full-time? HRA still valid if you pay rent. Employer location doesn't matter — your residence does.
- Rent > ₹1 lakh/year? Landlord's PAN mandatory (not requesting it disqualifies the claim). If landlord doesn't have PAN, a signed declaration with full name + address is required.
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Research tool · not investment advice.
Axel Markets is an information + analytics product. We are not a SEBI-registered Research Analyst (RA) or Investment Adviser (IA). Nothing on this page is a buy, sell, or hold recommendation. Past performance is not indicative of future returns. Verify all data against the authoritative source (NSE, BSE, AMFI, SEBI, company RHP / factsheet) before acting. HRA exemption only available under the OLD tax regime (opt-in). New regime (FY26 default) taxes HRA in full. Rules are per sec 10(13A) + Rule 2A. Scrutiny cases typically ask for rent receipts, bank transfer proofs, landlord PAN.