HRA Calculator – Calculate House Rent Allowance & Tax Exemption Online

Your salary slip shows ₹20,000 as House Rent Allowance, and you're paying ₹15,000 in monthly rent. But how much of that HRA is actually tax-free?

Use Pocketly's free HRA calculator to find out. Enter your basic salary, HRA received, rent paid and city of residence. The calculator estimates your exempt HRA, taxable HRA and annual allowance.

Our HRA tax exemption calculator follows the applicable Indian income tax rules and helps salaried employees check their rent-related tax benefits under the old tax regime.

How to Use the HRA Calculator Online

You don't need to work out the percentages separately. Follow these steps.

1. Enter your basic salary: Check the basic pay shown on your monthly payslip.

2. Add eligible DA: Include dearness allowance if it qualifies under the applicable rules.

3. Enter HRA received: Use the House Rent Allowance paid by your employer.

4. Enter monthly rent: Add the amount you actually pay for your accommodation.

5. Select your city: Choose where your rented home is located.

6. Check your results: The calculator shows your eligible exemption and taxable HRA.

If your salary or rent changed during the year, calculate each period separately for a more accurate annual estimate.

HRA Calculation Formula in India

HRA exemption is calculated using three values. The lowest of the three determines the tax-free portion, provided you meet the conditions.

HRA Exemption = Lowest of:

1. Actual HRA received.

2. Rent paid minus 10% of eligible salary.

3. 50% of eligible salary for specified cities or 40% for other locations.

For this purpose, eligible salary generally means basic salary plus dearness allowance where it forms part of employment terms.

HRA Calculation Example for ₹50,000 Basic Salary

Suppose you're working in Bengaluru and paying ₹22,000 monthly rent.

HRA exemption computation:

• Actual HRA received: ₹25,000

• Rent minus 10% salary: ₹22,000 − ₹5,000 = ₹17,000

• 50% of basic salary: ₹25,000

The lowest amount is ₹17,000.

You can claim an estimated annual exemption of ₹2,04,000 under the old tax regime if these amounts apply throughout the year and all conditions are met.

Remember, this reduces taxable salary. It doesn't mean you receive ₹2,04,000 as a tax refund.

HRA Tax Calculation for Metro and Non-Metro Cities

Your residential location matters because the exemption formula includes a salary-based percentage.

From 1 April 2026, eight Indian cities qualify for the 50% limit under Rule 279 of the Income-tax Rules, 2026.

For FY 2025–26, the 50% limit applied only to Delhi, Mumbai, Kolkata and Chennai.

The city-based limit is only one part of the calculation. It doesn't mean everyone living in Bengaluru or Mumbai can claim half their salary as tax-free HRA.

HRA Exemption Under Old and New Tax Regimes

Before calculating your exemption, check which tax regime you plan to choose.

Under the new regime, HRA received is not eligible for the separate HRA tax exemption.

However, salaried individuals may qualify for other benefits, including the standard deduction. Read our guide on standard deduction in the new tax regime to understand how it affects taxable salary.

You should compare the overall tax payable under both regimes rather than choosing based only on HRA.

How to Calculate Annual HRA Tax Exemption

If your HRA, salary and rent remain unchanged for 12 months, multiply the eligible monthly exemption by 12.

Annual HRA Exemption = Monthly HRA Exemption × 12

Suppose your monthly exempt HRA is ₹10,000.

Your annual exemption would be ₹1,20,000.

But say you moved from Chennai to Coimbatore in September or received a salary increase halfway through the year. You should calculate the exemption for each relevant period separately.

Our HRA exemption calculator can help you work out each period before adding the figures.

Documents Required for HRA Tax Exemption

You should maintain proper records of your rent payments, especially when claiming the exemption through your employer.

Common supporting documents include:

• Rent receipts

• Rental agreement

• Landlord's name and address

• PAN of the landlord, where required

• Bank statements or other evidence of rent payment

For employer reporting, landlord PAN details are generally required when aggregate rent exceeds ₹1 lakh during the tax year.

Only claim HRA exemption for genuine rent payments that meet the applicable conditions.

Can You Claim HRA Without Receiving HRA?

If your employer doesn't provide a House Rent Allowance component, you cannot claim HRA exemption simply because you live in a rented property.

Some eligible taxpayers may qualify for a separate deduction for rent paid under the old tax regime, subject to specific conditions.

This is different from HRA exemption and should not be calculated using the regular HRA formula.

HRA Rebate Calculation vs HRA Exemption

Although people often search for HRA rebate calculation, HRA exemption and tax rebate are different.

An exemption reduces the amount of salary included in taxable income. A rebate reduces the income tax payable, subject to its own conditions.

Suppose ₹60,000 of your annual HRA is exempt. Your taxable salary may reduce by ₹60,000, but that doesn't mean your income tax bill reduces by the same amount.

Your actual tax saving depends on your overall taxable income and tax regime.

How HRA Calculation Helps With Monthly Budget Planning

HRA isn't just a number on your payslip. Understanding the taxable and exempt portions can help you estimate your income after tax and plan household expenses.

Consider an employee earning ₹40,000 after deductions and spending ₹12,000 on rent. That's 30% of take-home income going towards accommodation.

To plan the remaining amount, try Pocketly's 50/30/20 rule calculator. It helps divide income into essential expenses, personal spending and savings.

Our recent article on how to budget your salary using the 50/30/20 rule explains how to adjust these percentages when rent takes up a large part of your salary.

If you're starting your first job, our guide to Gen Z money habits in 2027 also covers managing rent, spending, savings and borrowing decisions.

Managing Rent, Salary and Personal Loan Repayments

Rent is usually one of the first expenses you need to cover when your salary arrives. If you already have a personal loan, its scheduled repayment also needs a place in your budget.

You can use Pocketly's personal loan EMI calculator to estimate monthly repayments before borrowing.

For comparing different loan amounts, interest rates and tenures, our online EMI calculator can help you understand the possible repayment costs.

At Pocketly, we offer digital applications for personal loans from ₹1,000 to ₹50,000 through our lending platform, subject to eligibility and lender assessment.

Eligible working professionals can explore our personal loans for salaried individuals or review the personal loan options available through Pocketly.

Borrowing creates a repayment obligation. Check interest, APR, processing fees and total repayment before accepting any loan.

Disclaimer: The calculator provides estimates for informational purposes. Actual exemption depends on the tax year, tax regime, employment details, rent payments and applicable rules. Consider consulting a qualified tax professional for personalised advice.

Frequently Asked Questions About HRA Calculator

1. What is an HRA calculator?

An HRA calculator estimates how much House Rent Allowance is exempt from income tax and how much remains taxable based on salary, rent and applicable rules.

2. How is HRA calculated on basic salary?

The exemption is the lowest of actual HRA received, rent exceeding 10% of eligible salary, and 40% or 50% of eligible salary, depending on location.

3. Can I calculate HRA tax exemption online?

Yes. Enter your basic salary, eligible DA, HRA received, rent and residential city in Pocketly's free HRA tax exemption calculator.

4. Is HRA exempt under the new tax regime?

No. HRA exemption is not available under the new tax regime. Eligible employees may claim it under the old tax regime.

5. What is the HRA exemption limit in Bengaluru for 2026?

From tax year 2026–27, Bengaluru qualifies for the 50% salary limit. The actual exemption still depends on the lowest amount under the prescribed formula.

6. Is HRA calculated on basic salary or CTC?

HRA exemption uses eligible salary components, generally basic salary and qualifying DA. It is not calculated using your entire CTC.

7. Can I claim HRA if I live with my parents?

You may qualify if you genuinely pay rent to your parents, maintain supporting records and satisfy applicable tax rules. The rental income must also be accounted for appropriately by the recipient.

8. Can I claim HRA without rent receipts?

You must be able to support actual rent payments. Employers may request receipts, rental agreements or other relevant evidence.

9. Can I claim HRA if my rent is less than 10% of salary?

Generally, no HRA exemption arises when actual rent does not exceed 10% of eligible salary.

10. Is Pocketly's HRA exemption calculator free?

Yes. You can use Pocketly's HRA calculator free of charge to estimate your eligible exemption and taxable allowance.