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The exempt part of house rent allowance under section 10(13A) and Rule 2A: the least of actual HRA, rent above 10% of salary, and 50% or 40% of salary.
House rent allowance is partly exempt from income tax for a salaried employee who pays rent for accommodation they live in, under s.10(13A) of the Income-tax Act read with Rule 2A. The exempt amount is the least of three figures, and the rest of the HRA is taxable.
The exemption is available only under the old tax regime. An employee who has opted for the new regime under s.115BAC cannot claim it, so this HRA exemption calculator is useful only for old-regime employees.
Enter your figures, then press Calculate
Your 6 inputs become a full breakdown, with every step of the working shown beneath the headline figures.
Three amounts are computed from the same year's figures, and the lowest of them is exempt. Everything turns on the definition of salary used in two of the three.
Exempt HRA = least of (Actual HRA; Rent paid − 10% of salary; 50% of salary in a notified city or 40% elsewhere), where salary = basic + DA (retirement-linked) + turnover commission
For Rule 2A, salary means basic plus dearness allowance where the terms of employment count DA for retirement benefits, plus commission fixed as a percentage of turnover. Other allowances are excluded.
Actual HRA received for the period; rent paid less 10% of salary for the same period; and 50% of salary for the notified cities (from FY 2026-27: Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad; earlier years only the first four), 40% elsewhere.
The lowest of the three is exempt under s.10(13A). The remainder of the HRA is added to taxable salary.
Each amount is computed for the months in which HRA was received and rent paid. If salary, HRA, rent or city changes during the year, compute each stretch separately and add them.
What this does not include
Asked often enough about this calculation to be worth answering beside it.
No. The s.10(13A) exemption is one of the benefits given up under the new regime in s.115BAC. If an employee has opted for the new regime, the whole HRA is taxable.
From 1 April 2026 (FY 2026-27), the Income-tax Rules 2026 give the 50% limit for Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Up to FY 2025-26, Rule 2A gave 50% only for Delhi, Mumbai, Kolkata and Chennai. Every other city uses 40%.
Basic plus dearness allowance where DA forms part of retirement benefits, plus any commission fixed as a percentage of turnover. Gross salary and other allowances are not included.
Then the second amount is zero, so the exemption is zero and all HRA is taxable.
Compute each period separately with the months it covers and add the exempt amounts. The calculator handles one set of figures at a time, so run it once per period.
A calculator applies a rule to figures you type in. A payroll run applies it to your actual employee record, your locations and your verified declarations, which is where Professional Tax, LWF and TDS also resolve.
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