HRA Exemption Calculator
Section 10(13A) — old tax regime only
₹50,000
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Annual HRA exemption
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Rule 1: Actual HRA received
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Rule 2: 40% of basic+DA
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Rule 3: Rent − 10% of basic+DA
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HRA that becomes taxable
Minimum of three rules wins
The exemption is the SMALLEST of: actual HRA received, 50%/40% of basic+DA, or rent-minus-10%-of-basic. Whichever is lowest becomes your exemption; the rest of the HRA is fully taxable.
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Key reminders for HRA
- Old regime only: HRA exemption isn't available under the new tax regime (post FY2023-24)
- Landlord PAN mandatory: if annual rent > ₹1 lakh
- Rent through bank/UPI: never cash — IT department actively queries cash rentals
- Living with parents: legally rent to parents, get rent receipts, parents declare the income — works if they're in a lower tax slab
The three-rule formula: exemption = min(actual HRA, 50/40% of basic+DA, rent−10% of basic+DA). Most people don't know which rule bites them. If Rule 3 is lowest, your rent is too cheap relative to your salary.