Free tool
India HRA exemption calculator
Estimate the exempt part of house rent allowance from the three limits in the India income-tax rule. Monthly figures, old regime, and indicative only.
The link carries your figures in the address itself. Nothing is stored on our side.
The working
| Measure | Value | How it is worked out |
|---|---|---|
| The working appears here once your figures are in. | ||
How the answer is worked out
Every step, in the open, so you can rebuild it in a few spreadsheet cells and disagree with it if you want to. A calculator you cannot check is an ad.
The three limits
The exempt HRA is the lowest of three figures. First, the actual HRA you received. Second, the rent you paid minus ten percent of salary. Third, fifty percent of salary if you live in a listed metro city, or forty percent otherwise. Salary here means basic plus dearness allowance. The tool works out all three on the monthly figures you enter and takes the smallest.
Why rent minus ten percent
The second limit is rent paid minus ten percent of salary, and it is what stops HRA being exempt when little or no rent is actually paid. If your rent is below ten percent of salary, this limit is zero or negative, and because it is the lowest of the three the exemption collapses to nil. HRA relief is a relief for rent genuinely paid, and this is the limit that enforces it.
Metro or non-metro, and the balance
The third limit is fifty percent of salary in the listed metro cities and forty percent elsewhere, so the city you pick changes the ceiling. Whatever the lowest limit turns out to be is the exempt part; the HRA you received minus that exempt part is the taxable balance, which is what is added to your taxable income.
What this tool does not know
Which regime you are in. This exemption exists under the old tax regime; the new regime does not allow it, and the tool does not decide which applies to you. It also does not settle the definitions the rule turns on: exactly what counts in salary, whether commission on turnover is included, and which cities are treated as metro are set by rules that change. Confirm the current position rather than relying on the figure here.
It is an estimate of one exemption, not a tax computation, and it says nothing about the rest of your return. For how HRA sits inside a cost to company, use the India CTC breakdown calculator, and for another India statutory figure, the India gratuity calculator. For the wider context, see the guide to statutory payroll in India. Capstan does not compute statutory payroll or tax.
Questions with complete answers
How is the HRA exemption worked out?
It is the lowest of three figures: the actual HRA received, the rent paid minus ten percent of salary, and fifty percent of salary for a metro city or forty percent otherwise, where salary is basic plus dearness allowance. The tool computes all three on your monthly inputs, takes the smallest as the exempt amount, and shows the taxable balance. Every limit is in the working.
Does HRA exemption apply under the new tax regime?
No. The HRA exemption is available under the old regime; the new regime does not allow it. This tool estimates the exemption as it works under the old regime and does not decide which regime applies to you. If you are on the new regime, the exempt figure here does not apply, and you should confirm your position with a qualified professional.
What counts as salary here?
For this rule, salary is basic pay plus dearness allowance that counts for retirement benefits, and in some cases a commission based on a fixed percentage of turnover. It is not your full cost to company or gross pay. The tool uses the basic plus DA figure you enter, so put in that wage base rather than the headline salary, and confirm the exact definition for your case.
Why is my exemption low even though I get a lot of HRA?
Almost always because of the second limit, rent paid minus ten percent of salary. If your rent is low relative to your salary, that figure is small, and since the exemption is the lowest of the three it caps the relief regardless of how much HRA you are paid. The exemption is tied to rent actually paid, not to the allowance on your payslip.
Is this monthly or annual?
The inputs and the headline are monthly, and the detail line shows an approximate annual exemption as twelve times the monthly figure. That annualisation assumes your salary, HRA, rent and city stayed the same all year. If any of them changed during the year, the exemption is worked out period by period, so treat the annual figure as indicative and confirm it against your actual months.
An HRA estimate is a guess until the inputs are on a record someone maintains.