Which cities are metro for HRA calculation?

Only four cities qualify as metro for HRA: Mumbai, Delhi, Chennai, and Kolkata. Employees in these cities get 50% of basic salary. All other cities are non-metro with 40% limit.

Is HRA available in the New Tax Regime?

No. HRA exemption is NOT available under the New Tax Regime. It is only available under the Old Tax Regime.

Can I claim HRA if I pay rent to parents?

Yes, you can claim HRA by paying rent to parents. The property must be in their name, rent paid via bank transfer, rent agreement must exist, and parents must declare rent as income in their ITR.

What is the minimum rent to claim HRA exemption?

Rent paid must exceed 10% of your basic salary. If rent is equal to or less than 10% of basic, HRA exemption is zero.

Do I need landlord PAN for HRA?

Landlord PAN is mandatory only if annual rent exceeds Rs 1,00,000. Below this, rent receipts are sufficient.

HRA Exemption Calculator FY 2025-26 | Free Online Tool

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City Type

Enter Values As

Salary Details

Basic Salary ₹50,000/mo

₹

Basic salary only — exclude HRA, DA (unless forming part of retirement benefits)

HRA Received from Employer ₹20,000/mo

₹

Rent Details

Actual Rent Paid ₹18,000/mo

₹

Total rent paid to landlord. Must exceed 10% of basic salary to claim any exemption.

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Enter your salary & rent details, then click Calculate to see your exact HRA exemption.

The Formula

How is HRA Exemption Calculated?

Section 10(13A) — 3-Rule Formula

HRA exemption = minimum (lowest) of these three amounts, calculated monthly:

Three Rules — Take the Lowest

Rule 1: Actual HRA received from employer per month
Rule 2: 50% of Basic (Metro) or 40% of Basic (Non-Metro)
Rule 3: Rent Paid − 10% of Basic Salary

Actual HRA from salary slip

50% or 40% of basic salary

Rent paid minus 10% of basic

✅ Exempt HRA = Minimum of Rule 1, 2 & 3 | Taxable HRA = HRA Received − Exempt Amount

City Classification

Metro vs Non-Metro Cities

City	Category	HRA % of Basic
Mumbai Metro	Tier 1	50%
Delhi / NCR Metro	Tier 1	50%
Chennai Metro	Tier 1	50%
Kolkata Metro	Tier 1	50%
Bangalore Non-Metro	Tier 2	40%
Hyderabad Non-Metro	Tier 2	40%
Pune Non-Metro	Tier 2	40%
Ahmedabad Non-Metro	Tier 2	40%
All other cities Non-Metro	Tier 2/3	40%

⚠️ Only 4 cities are Metro for HRA: Mumbai, Delhi, Chennai, Kolkata. Bangalore, Hyderabad & Pune are Non-Metro despite being large cities.

Complete Guide

HRA Exemption — Everything You Need to Know

⚠️ HRA exemption is available only under the Old Tax Regime. It is NOT available if you opt for the New Tax Regime.

What is HRA and Who Can Claim It?

House Rent Allowance (HRA) is a salary component provided by employers to cover rental expenses. Under Section 10(13A) of the Income Tax Act, a portion of HRA is exempt from tax if you live in a rented house and file under the Old Tax Regime.

When is HRA Fully Taxable?

If you do not pay rent (living in own house)
If you choose the New Tax Regime
If rent paid is less than or equal to 10% of basic salary
If you are self-employed — HRA is only for salaried individuals

Can I Claim HRA + Home Loan Interest Together?

Yes! You can claim both simultaneously if: you are paying rent where you work, and your own property is in a different city, OR the property is in the same city but you genuinely cannot reside there. Both Section 10(13A) and Section 24(b) can be claimed together.

Paying Rent to Parents — Is It Legal?

Yes, it is completely legal. Ensure: property is in parent's name, rent is paid via bank transfer, a valid rent agreement exists, and parents declare the rent in their ITR. This works especially well if parents are in a lower tax bracket.

Documents Required for HRA Claim

Monthly/quarterly rent receipts
Rent agreement / lease deed
Landlord's PAN — mandatory if annual rent exceeds ₹1,00,000
Bank transfer proof of rent payments

FAQs

Frequently Asked Questions

How is HRA exemption calculated?+

HRA exemption = minimum of: (1) Actual HRA received, (2) 50% of basic for metro / 40% for non-metro, (3) Rent paid minus 10% of basic salary. All calculated monthly. Our calculator applies all three rules and picks the lowest automatically.

Which cities are Metro for HRA?+

Only Mumbai, Delhi (NCR), Chennai, and Kolkata are classified as metro cities for HRA calculation (50% limit). All other cities — including Bangalore, Hyderabad, Pune, Ahmedabad — are non-metro with a 40% limit, even though they are major cities.

Is HRA exemption available in the New Tax Regime?+

No. HRA exemption under Section 10(13A) is completely unavailable under the New Tax Regime. To claim HRA, you must file under the Old Tax Regime. Use our Regime Comparator to check if Old Regime is worth it for your income.

Can I pay rent to my parents and claim HRA?+

Yes! Paying rent to parents is legally valid. Requirements: property must be in their name, rent paid via bank transfer, valid rent agreement, and parents must show this rent as income in their ITR. This reduces overall family tax when parents are in a lower slab.

Do I need my landlord's PAN for HRA?+

Landlord PAN is mandatory only if annual rent exceeds ₹1,00,000 (more than ₹8,333/month). Below this, only rent receipts are needed. If landlord doesn't have PAN, a self-declaration from them is accepted by employers.

What if my rent is less than 10% of basic salary?+

If rent paid ≤ 10% of basic salary, Rule 3 becomes zero or negative, making your HRA exemption NIL. You get no HRA benefit even if you receive HRA from employer. The entire HRA received is added to your taxable income.

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