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Calculate HRA exemption and how much of your rent allowance is tax-free.
TaxNext's HRA calculator works out how much of a salaried employee's House Rent Allowance is exempt from income tax under section 10(13A) of the Income Tax Act, read with Rule 2A. It applies only to salaried individuals who actually pay rent and receive HRA as a named component of salary — the old regime allows this exemption, and it must be claimed against actual rent paid, not just because HRA was received.
The exempt amount is the smallest of: actual HRA received, rent paid minus 10% of salary (basic + DA that counts toward retirement benefits), and 50% of salary in a metro city or 40% elsewhere. Whichever of the three is lowest sets the exemption — the other two don't matter once one of them is the binding constraint.
In a non-metro city the cap is 40% of salary rather than 50%, and here rent paid minus 10% of salary is the smallest of the three figures, so that's what limits the exemption.
Even though actual rent paid is the highest number here, the exemption can never exceed the lowest of the three figures — 50% of salary caps it well below the HRA actually received.
Rent paid (₹60,000) is less than 10% of salary (₹72,000), so the second leg of the rule goes to zero — the whole HRA received becomes taxable, however much was actually received.
The section 10(13A) exemption calculation for a salaried individual under the old regime. It does not cover the new regime (where this exemption is not available), self-employed individuals (who instead claim relief under section 80GG), or cases with no HRA component in salary at all.
Figures are illustrative estimates, not tax advice. For the underlying rule, see the Income Tax Department rate and rule tables.
Reviewed by VNAV & Associates, Chartered Accountants. Last updated: August 2026.
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