Calculate your exact House Rent Allowance (HRA) exemption based on salary, rent paid, and your city type for FY 2025-26.
HRA Exemption Result
Exempt HRA Amount
0
Tax-free under Section 10(13A)
Taxable HRA Amount
0
Added to your taxable salary
Calculation Breakdown (Lowest of the three):
1. Actual HRA Received:0
2. Rent Paid minus 10% of Basic:0
3. 50% of Basic Salary:0
⚠️ Disclaimer: Calculations are for reference only. Verify with official Income Tax Department sources or consult a tax professional before filing.
HRA Exemption Rules: Old vs New Tax Regime (FY 2025-26)
House Rent Allowance (HRA) is one of the most common salary components used by employees to save tax. However, the rules for claiming HRA exemption have shifted dramatically with the introduction of the New Tax Regime.
Old Tax Regime: You can fully claim the HRA exemption under Section 10(13A) of the Income Tax Act. If you live in a rented house and receive HRA as part of your salary, you can calculate your exempt amount and reduce your taxable income.
New Tax Regime: For FY 2025-26 (AY 2026-27) and beyond, the HRA exemption is completely abolished under the default New Tax Regime. If you opt for the new regime, the entire HRA amount received from your employer becomes fully taxable.
Need more details? Read our complete, in-depth HRA Exemption Calculation Guide to understand the nuances of rent agreements and PAN card requirements for landlords.
The Three-Condition Formula for HRA Exemption
If you are under the Old Tax Regime, the Income Tax Act doesn't just make your entire HRA tax-free. The exempt HRA amount is calculated as the lowest of the following three conditions:
The actual HRA received from your employer during the financial year.
Actual rent paid minus 10% of your Basic Salary + Dearness Allowance (DA).
50% of your Basic Salary + DA if you live in a Metro city (Delhi, Mumbai, Chennai, Kolkata), OR 40% if you live in a Non-Metro city.
Worked Example: Calculating Exempt HRA
Let's look at a practical calculation for an employee living in Bangalore (Non-Metro for HRA purposes) for FY 2025-26:
Scenario:
Monthly Basic Salary: ₹50,000 (Annual: ₹6,00,000)
Monthly HRA Received: ₹20,000 (Annual: ₹2,40,000)
Monthly Rent Paid: ₹18,000 (Annual: ₹2,16,000)
City Type: Non-Metro (Bangalore)
Applying the 3 Conditions (Annual):
Actual HRA received: ₹2,40,000
Rent Paid minus 10% of Basic: ₹2,16,000 - ₹60,000 = ₹1,56,000
40% of Basic Salary (Non-Metro): ₹2,40,000
Result:
The lowest of the three is ₹1,56,000. This amount is completely tax-exempt. The remaining HRA (₹2,40,000 - ₹1,56,000 = ₹84,000) will be added to the taxable income.
Frequently Asked Questions
Can I claim HRA if I live with parents?▼
Yes, you can claim HRA exemption even if you live with your parents, provided you actually pay rent to them. Your parents must report this rent as "Income from House Property" in their own income tax returns. However, you cannot claim HRA if the property is jointly owned by you and your parents.
Do I need rent receipts to claim HRA?▼
Yes. If your annual rent exceeds ₹36,000 (i.e., ₹3,000 per month), your employer will require rent receipts to grant the HRA exemption. If the annual rent paid exceeds ₹1,00,000, you must also provide the PAN card details of your landlord.
Is HRA exemption available under new tax regime?▼
No, the HRA exemption under Section 10(13A) is not available under the New Tax Regime for FY 2025-26. If you choose the new regime, your entire HRA component is taxable.
What if my landlord does not have a PAN card?▼
If your rent exceeds ₹1,00,000 per year and your landlord does not have a PAN card, you must get a declaration signed by the landlord stating that they do not possess a PAN, along with their name and address.