What is an HRA Calculator?
House Rent Allowance exemption is available only where the applicable tax regime permits it, and the exempt amount is the least of three tests: actual HRA received, rent paid minus 10% of eligible salary, and a city-based percentage of eligible salary.
The city test changed from 1 April 2026. Rule 279 of the Income-tax Rules, 2026 gives the 50% ceiling to Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru; any other location uses 40%. For periods up to FY 2025-26, the earlier Rule 2A framework used the 50% ceiling only for Mumbai/Bombay, Kolkata/Calcutta, Delhi and Chennai/Madras. Select the period and city rather than applying one list to every year.
How the exemption is calculated
For Tax Year 2026-27 onward, Rule 279 defines salary for this calculation as salary including dearness allowance if the terms of employment provide for it, but excluding other allowances and perquisites. Use the figures for the relevant period of occupation; if salary, rent or location changed, split the year into separate periods.
Choose the tax period first, then the location of the rented accommodation. The calculator applies the correct 50%/40% city ceiling and the same minimum-of-three method used in the tax rule.
Worked example: Bengaluru in Tax Year 2026-27
Assume eligible monthly salary of ₹40,000, HRA received of ₹20,000 and rent of ₹25,000. The three limits are ₹20,000 actual HRA, ₹21,000 rent minus 10% of salary, and ₹20,000 as 50% of salary. Bengaluru is in the 50% group from 1 April 2026, so the exemption is ₹20,000 per month.
With the same figures in Jaipur, the city ceiling is 40% of salary, or ₹16,000, so the exemption falls to ₹16,000. The difference comes from the statutory location rule, not from an estimate of local rent levels.
The same Bengaluru example before 1 April 2026
For a period up to FY 2025-26, Bengaluru remained in the earlier 40% group. With the same ₹40,000 salary, ₹20,000 HRA and ₹25,000 rent, the city ceiling would therefore be ₹16,000. This is why the tax period matters: the eight-city list must not be applied retrospectively.
Primary references
For Tax Year 2026-27 onward, see Income-tax Rules, 2026 — Rule 279. For the earlier four-city framework, see the Income Tax Department's published guidance on section 10(13A) / Rule 2A.
Frequently asked questions
Which cities get the 50% HRA ceiling from 1 April 2026?
Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru. Rule 279 of the Income-tax Rules, 2026 lists these eight locations; any other place uses 40%.
What rule applies up to FY 2025-26?
The earlier Rule 2A framework used the 50% ceiling only for Mumbai/Bombay, Kolkata/Calcutta, Delhi and Chennai/Madras. Other locations, including Bengaluru, Hyderabad, Pune and Ahmedabad, used 40%.
Can I claim HRA exemption under the new tax regime?
HRA exemption is generally relevant to the old-regime computation. Use the tax regime and tax-year rules applicable to your filing rather than treating HRA as automatically exempt.
What salary should I enter?
For Rule 279, salary includes dearness allowance if the employment terms provide for it and excludes other allowances and perquisites. Do not enter full CTC automatically.
What if I do not pay rent?
The exemption becomes zero because rent paid minus 10% of eligible salary is zero or negative and therefore binds the minimum-of-three calculation.
What if my salary, rent or city changed during the year?
Calculate each relevant period separately using the salary, HRA, rent and city that applied during that period, then add the period exemptions.
Why does the calculator ask for a tax period?
Because the higher 50% city list changed on 1 April 2026. A tax-year-aware selector prevents the new eight-city rule from being applied to earlier periods.