HRA Calculator India 2026: Section 10(13A) Exemption Tool

If you pay rent and your salary has an HRA component, part of it is exempt from tax. The catch: the exemption is the least of three numbers, not the HRA on your payslip. Enter basic, HRA received, monthly rent, and city above, and the calculator returns the exempt amount and the taxable balance.

One thing up front. HRA exemption is an old-regime benefit. Under new regime, 10(13A) is gone, so the calculator shows old-regime impact only.

What is HRA exemption under Section 10(13A)?

Section 10(13A) of the Income Tax Act 1961, read with Rule 2A of the Income Tax Rules 1962, lets a salaried employee treat part of their House Rent Allowance as exempt income, provided they pay rent and don't own the house they live in. The exemption isn't a flat percentage. It's the smallest of three values, and the third one bites most people.

The "least of" rule, in plain English

Your HRA exemption is the lowest of these three numbers:

  1. Actual HRA received from your employer for the year.
  2. 50% of basic salary if you live in a metro. 40% of basic if you live anywhere else.
  3. Rent actually paid in the year, minus 10% of basic salary.

Whichever is smallest is your exemption. The rest of the HRA gets added to taxable salary. If you don't pay rent, condition 3 goes negative, the formula collapses to zero, and you get nothing. That's the self-occupied case.

Metro versus non-metro: only four cities count

This part surprises a lot of HR teams. For HRA under Rule 2A, only four cities are metros:

  • Delhi
  • Mumbai
  • Kolkata
  • Chennai

Bengaluru, Hyderabad, Pune, Ahmedabad, Gurugram, Noida, and every other tier-1 city outside that list are non-metro for HRA. Income tax law has not updated this list. So a person renting in Koramangala is, for HRA arithmetic, in the same bucket as someone renting in Indore.

Worked example: Bengaluru employee, ₹50,000 basic

Take a typical IT-services payroll. Basic ₹50,000 a month (₹6,00,000 a year). HRA ₹20,000 a month (₹2,40,000 a year). Rent ₹18,000 a month (₹2,16,000 a year). City: Bengaluru, so non-metro.

  1. Actual HRA received: ₹2,40,000.
  2. 40% of basic (non-metro): ₹2,40,000.
  3. Rent minus 10% of basic: ₹2,16,000 minus ₹60,000 = ₹1,56,000.

Least of the three is ₹1,56,000, so that's the exemption. Taxable HRA: ₹2,40,000 minus ₹1,56,000 = ₹84,000, added back to salary.

Move the same employee to Mumbai and condition 2 jumps to 50% of basic, ₹3,00,000. Conditions 1 and 3 don't move. Least is still ₹1,56,000. Same exemption. The metro bump only helps when condition 2 is the binding constraint, which usually means high HRA with low rent.

Documentation you need

Whether you submit through Form 12BB or claim while filing your ITR, keep this trail ready:

  • Monthly rent receipts signed by the landlord.
  • A rent agreement, even a simple one. Helps in scrutiny.
  • Landlord PAN if annual rent crosses ₹1,00,000. Hard rule.
  • Bank or UPI payment trail. Cash rent is allowed but auditors prefer a digital footprint.

If you miss the Form 12BB window with your employer, the exemption isn't lost. You can still claim it on your ITR with the receipts.

Edge cases worth knowing

  • Rent paid to parents or spouse. Allowed for parents if they receive the rent and declare it as income. Paying rent to your spouse is a grey area and tribunals have ruled both ways. Safer to avoid.
  • Partial-year rent. If you paid rent for only 7 months, run the formula on those 7 months. The other 5 get no HRA exemption.
  • Multiple cities in one year. Split the calculation. Run it separately for the metro period and the non-metro period.
  • Own a house in another city while renting in your work city. Allowed. A self-occupied home in your hometown does not block HRA on your rented flat in your work city.
  • HRA not in your CTC. No HRA, no 10(13A). You can fall back on section 80GG, but it caps at ₹5,000 a month.

The new regime trap

Since FY 2023-24, new regime is the default. Under new regime, HRA exemption under section 10(13A) is not available. Same for LTA, 80C, 80D, home loan interest on a self-occupied house, and most of the standard exemption stack. The HRA on your payslip becomes fully taxable.

If your rent is high and your basic is moderate, the HRA exemption alone can make old regime cheaper. Compare the rupee value of the exemption above against your new regime tax savings before you opt in.

FAQ

My employer doesn't give me HRA. Can I still claim a rent deduction? Not under 10(13A). You can claim under section 80GG, capped at ₹5,000 a month or 25% of total income, whichever is less.

Is Bengaluru or Pune a metro for HRA? No. Only Delhi, Mumbai, Kolkata, and Chennai count, even though Bengaluru and Pune are metros for almost every other purpose.

Does work-from-home affect HRA? No. As long as you pay rent on the place you live in, your office location doesn't matter.

Can I pay rent to my parents and claim HRA? Yes, with conditions. Real rent agreement, real bank transfers, and your parents must declare the rent as income on their return.

What if my landlord won't share PAN? If annual rent crosses ₹1,00,000 without PAN, the employer cannot give the exemption through payroll. You'd need Form 60 from the landlord or claim through ITR.

Running this across a whole company

For one employee, this calculator is enough. For 50 or 500 staff, spreadsheet HRA every payroll cycle gets painful. Indian HRM runs the 10(13A) math per employee per month, picks the metro or non-metro rate from the address on file, applies it inside the old-regime tax computation, and produces a Form 16 that holds up in scrutiny. Free 3-month trial if you want to test it on real payroll data.