HRA Exemption Calculator — Section 10(13A)
How HRA Exemption Works — Section 10(13A)
Under Rule 2A of the Income Tax Rules, the HRA exemption is the lowest of three limits calculated on an annual basis:
- Limit 1 — Actual HRA Received: The HRA your employer paid you during the year.
- Limit 2 — Rent Paid minus 10% of Basic: (Annual Rent Paid) − (10% × Annual Basic Salary). This limit ensures only "excess" rent (beyond 10% of basic) qualifies. If your rent paid is less than 10% of basic, this limit is ₹0.
- Limit 3 — 50% or 40% of Basic: 50% of Basic if you live in a metro city (Delhi, Mumbai, Chennai, Kolkata); 40% for all other cities.
The minimum of these three is your exempt HRA. Any HRA received beyond this is added to your taxable income.
Metro vs Non-Metro Cities
Only four cities qualify as "metro" for HRA purposes under Rule 2A: Delhi, Mumbai, Chennai, and Kolkata. Bangalore, Hyderabad, Pune, Ahmedabad — despite being large cities — are classified as non-metro for this calculation. This means residents of these cities can exempt only 40% (not 50%) of basic salary under Limit 3.
New Tax Regime — No HRA Exemption
If you opt for the New Tax Regime under Section 115BAC, the Section 10(13A) HRA exemption is not available. Your entire HRA is added to your taxable salary. The New Regime offers a higher standard deduction (₹75,000 for FY 2025-26) and lower slab rates instead. Use our Old vs New Regime Calculator to compare which regime is better for you.
When Rent Receipts Are Required
If your annual HRA claim exceeds ₹1 lakh, you must provide the PAN of your landlord to your employer (for Form 12BB). For monthly rent above ₹8,333, rent receipts are mandatory. If your landlord is a family member, the arrangement must be genuine — the Income Tax Department has denied HRA claims on notional rent paid to relatives.
Worked Example
| Parameter | Amount |
|---|---|
| Annual Basic Salary | ₹6,00,000 |
| Annual HRA Received | ₹2,40,000 |
| Annual Rent Paid | ₹2,16,000 |
| City Type | Non-Metro |
| Limit 1 — Actual HRA | ₹2,40,000 |
| Limit 2 — Rent minus 10% of Basic | ₹1,56,000 (2,16,000 − 60,000) |
| Limit 3 — 40% of Basic | ₹2,40,000 |
| HRA Exempt (minimum) | ₹1,56,000 |
| Taxable HRA | ₹84,000 |
Frequently Asked Questions
Can I claim HRA if I live in my own house?
No. HRA exemption under Section 10(13A) requires that you actually pay rent for accommodation. If you own and live in your house, you cannot claim HRA exemption — even if your salary slip shows HRA as a component. You may instead claim a deduction on home loan interest under Section 24(b).
Can I claim both HRA exemption and home loan interest deduction?
Yes, but only under the Old Tax Regime and only if the two properties are in different cities. For example, if you own a house in Delhi (on loan) but rent a place in Mumbai for work, you can claim both the home loan interest deduction (Section 24b) and HRA exemption for the Mumbai rent. If both properties are in the same city, the Income Tax Department may scrutinize the claim.
What if my employer does not give me HRA?
If HRA is not a component of your salary but you pay rent, you can claim a deduction under Section 80GG (not Section 10(13A)). Section 80GG allows a deduction of the least of: (a) rent paid minus 10% of total income, (b) 25% of total income, or (c) ₹5,000 per month. This is only available if you are self-employed or your employer does not provide HRA.
What is the PAN requirement for HRA claims?
If your total annual HRA claim exceeds ₹1,00,000, you must obtain the PAN of your landlord and submit it to your employer as part of Form 12BB. If your landlord does not have a PAN, they must provide a declaration to that effect.
Is HRA exemption available in the New Tax Regime?
No. The New Tax Regime under Section 115BAC does not allow the HRA exemption under Section 10(13A). If you opt for the New Regime, your entire HRA is taxable. The trade-off is a higher standard deduction (₹75,000 for salaried individuals from FY 2024-25) and lower tax slab rates under the New Regime.
How is HRA calculated if I changed jobs mid-year?
HRA exemption is calculated separately for each period of employment. For each employer, use the basic salary, HRA received, and rent paid during that specific period. You must aggregate the exempt amounts from both employers when filing your ITR. The self-assessment route allows you to claim the correct exemption even if one employer's Form 16 shows a different amount.
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Indicative Methodology & Fact-Check: This calculator is based on Section 10(13A) of the Income Tax Act, 1961 read with Rule 2A of the Income Tax Rules, 1962. Results are indicative and for informational purposes only. This does not constitute professional tax advice. Always consult a Chartered Accountant for final tax planning. Ensure rent payments are genuine and supported by rent receipts/agreements.