How much of your HRA is actually tax-free?

The exact three-limb test your employer uses under Section 10(13A) — and what the new regime would cost you.

FY 2026-27 ready Metro & non-metro No signup

Your details (monthly)

DA is included only if it counts for retirement benefits. Bengaluru, Hyderabad, Pune and Gurgaon are non-metro for HRA purposes.

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Your HRA exemption

Sample figures — edit any field
TAX-FREE HRA (PER YEAR)
—
The exemption is the least of these three (annual):
HRA received (annual)—
Tax-free portion—
Taxable HRA added to income—
Old vs new regime: HRA exemption exists only in the old regime. In the new regime your entire HRA is taxable — but slab rates are lower.
Next step — the proof. Employers accept the exemption only against rent receipts.

Is your city a metro for HRA?

Only Delhi, Mumbai, Kolkata and Chennai get the 50% limb. Everywhere else is 40% — including Bengaluru, Hyderabad, Pune, Gurgaon and Noida. Pick your city for the correct rate, local rent levels, tenancy rules and the proof your employer will ask for.

FAQ

How is HRA exemption calculated?

Under Section 10(13A), the tax-free portion of HRA is the least of: (1) actual HRA received, (2) rent paid minus 10% of basic salary + DA, and (3) 50% of basic + DA in a metro city or 40% elsewhere. The rest of your HRA is taxable.

Which cities count as metro?

Only Delhi, Mumbai, Kolkata and Chennai qualify for the 50% limit. Bengaluru, Hyderabad, Pune, Gurgaon, Noida and all other cities use 40% — a common and costly mistake. We have a city-by-city HRA guide covering 28 cities with local rent levels and tenancy rules.

Can I claim HRA in the new tax regime?

No. The new regime removes the HRA exemption entirely. Whether the old regime still wins for you depends on your total deductions (HRA + 80C + health insurance etc.) versus the new regime's lower slab rates.

What documents do I need to claim HRA?

Rent receipts signed by your landlord (generate them free at rent.klair.in), your rent agreement, and the landlord's PAN if annual rent exceeds ₹1,00,000.

I live with my parents — can I still claim HRA?

Yes, if you genuinely pay them rent (bank transfer strongly recommended) and they declare it as income. You'll still need receipts and, above ₹1 lakh/year, their PAN.

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