Calculate exact tax-exempt and taxable HRA under Rule 2A of the Income Tax Rules, 1962. Compare 3 statutory limits, Metro vs Non-Metro, and check Old vs New Tax Regime.
✔ Last Verified: 15 Jul 2026
Select Income Tax Regime:
Explore Rent Sensitivity: ₹20,000 / month
Rule 2A Least-of-Three Evaluation
Condition 1: Actual HRA Received₹25,000 / month
Condition 2: Rent Paid minus 10% Salary₹15,000 / month(₹20,000 rent − ₹5,000 [10% of ₹50,000 salary])
Condition 3: 50% Metro Salary Ceiling₹25,000 / month(50% of ₹50,000 salary base)
Limiting Exemption Rule: Condition B (Rent Paid minus 10% of Salary)
Statutory Condition Comparison (Minimum of Three Determines Exemption)
Condition A: Actual HRA Received₹25,000
Condition B: Rent Paid minus 10% Salary₹15,000
Condition C: 50% Metro Salary Ceiling₹25,000
⚠️ Mandatory Landlord PAN Disclosure (CBDT Circular No. 20/2015): Your total annual rent paid of ₹2,40,000 exceeds the statutory threshold of ₹1,00,000 per annum(₹8,333/month). You must submit your landlord's valid PAN (or Form 60 along with landlord address) to your employer; otherwise, your employer is legally mandated to disallow the HRA exemption and deduct full TDS.
Tax-Exempt Monthly HRA
₹15,000
Annual Tax Exemption: ₹1,80,000
Taxable Monthly HRA
₹10,000
Annual Taxable Addition: ₹1,20,000
📖 How is this calculated with your exact numbers? (Step-by-Step Proof)
Step 1 (Salary Base Calculation): For HRA exemption under Rule 2A, `Salary = Basic (₹50,000) + DA (₹0) + Commission (₹0) =` ₹50,000 per month.
Step 3 (Final Exemption Derivation): The statutory exemption is the least of Condition A (₹25,000), Condition B (₹15,000), and Condition C (₹25,000), which is ₹15,000. Therefore, out of your ₹25,000 HRA, exactly ₹15,000 is tax-exempt and ₹10,000 is added to your taxable income.
About the HRA Calculator
House Rent Allowance (HRA) is a crucial salary component granted by employers in India to help employees cover residential rental expenses. Under Section 10(13A) of the Income-tax Act, 1961, read with Rule 2A of the Income-tax Rules, 1962, you can claim tax exemption on your HRA, provided you reside in a rented accommodation and opt for the Old Tax Regime.
Mathematical Formula & Logic
The statutory HRA exemption under Rule 2A is strictly determined as the LEAST (minimum) of three conditions: (1) Actual HRA received from your employer, (2) Actual rent paid minus 10% of your Salary (Basic + DA + fixed commission), and (3) 50% of Salary if residing in a Metro city (strictly Mumbai, Kolkata, Delhi, or Chennai) or 40% of Salary in any other Non-Metro city. If you opt for the New Tax Regime under Section 115BAC, HRA exemption is completely disallowed.
Statutory HRA Exemption (Section 10(13A) / Rule 2A Minimum Rule): ExemptHRA = Math.min(ActualHRA, Math.max(0, RentPaid - 0.10 * Salary), MetroFactor * Salary)
Taxable HRA Component: TaxableHRA = Math.max(0, ActualHRA - ExemptHRA)
Step-by-Step Example
Example 1 (Metro City Employee): You earn a basic salary of ₹50,000/month, receive ₹25,000/month as HRA, and pay ₹20,000/month rent in Mumbai under the Old Tax Regime. Condition A (Actual HRA) is ₹25,000. Condition B (Rent minus 10% Salary) is ₹20,000 - ₹5,000 = ₹15,000. Condition C (50% Metro Salary) is ₹25,000. The least of the three is ₹15,000. Hence, your tax-exempt HRA is ₹15,000/month (₹1,80,000/year), and the remaining ₹10,000/month is taxable.
Example 2 (Non-Metro Executive with DA): You earn ₹80,000 basic + ₹10,000 DA = ₹90,000 total salary, receive ₹40,000 HRA, and pay ₹45,000 rent in Bengaluru. Condition A is ₹40,000. Condition B is ₹45,000 - (10% of ₹90,000 = ₹9,000) = ₹36,000. Condition C (40% Non-Metro limit) is 0.40 * ₹90,000 = ₹36,000. The least of the three is ₹36,000. Your monthly exempt HRA is ₹36,000, and ₹4,000 is taxable.
Frequently Asked Questions
As per Rule 2A of the Income-tax Rules, 1962, the tax-exempt HRA is the minimum of three amounts: (1) Actual HRA received from your employer, (2) Actual rent paid minus 10% of your salary (Basic + DA + commission), and (3) 50% of your salary for Metro cities (Mumbai, Kolkata, Delhi, Chennai) or 40% for Non-Metro cities.
No. Under Rule 2A of the Income-tax Rules, only four traditional metropolitan cities qualify as Metro cities for the 50% salary ceiling: Mumbai, Kolkata, Delhi, and Chennai. All other cities, including major IT hubs like Bengaluru, Hyderabad, Pune, Gurgaon, Noida, and Ahmedabad, are legally classified as Non-Metro cities with a 40% salary ceiling.
No. Under the New Tax Regime introduced under Section 115BAC (which is the default tax regime from FY 2023-24 onwards), the HRA exemption under Section 10(13A) is completely disallowed. To claim tax exemption on your rent paid, you must explicitly opt for the Old Tax Regime when filing your return.
As per CBDT Circular No. 20/2015 and Section 192 of the Income Tax Act, if your total annual rent paid exceeds ₹1,00,000 (which equals approximately ₹8,333.33 per month), it is statutorily mandatory to provide your landlord's Permanent Account Number (PAN) to your employer. If the landlord does not have a PAN, a signed Form 60 declaration along with the landlord's name and address must be submitted.
Yes, you can legally claim HRA exemption when paying rent to your parents, provided the property is owned by them (not by you or co-owned by you), you pay genuine rent via traceable banking channels, and your parents report this rental income in their individual Income Tax Returns (ITR). However, you cannot claim HRA exemption for rent paid to your spouse.
If your actual rent paid is less than or equal to 10% of your salary (`Rent Paid <= 0.10 * Salary`), the second statutory condition (`Rent minus 10% of Salary`) evaluates to zero or a negative value. Consequently, your tax-exempt HRA becomes exactly ₹0, and the entire HRA received from your employer becomes fully taxable under your salary head.
Yes, the Income Tax Act permits you to claim both HRA exemption under Section 10(13A) and home loan interest deduction under Section 24(b) simultaneously, provided you live in a rented accommodation because your owned property is in another city or located far from your workplace due to genuine employment requirements.
No, Section 10(13A) applies strictly to salaried employees who receive a designated HRA component from their employers. If you are self-employed or salaried without an HRA component, you can claim a deduction for rent paid under Section 80GG of the Income Tax Act, subject to a statutory ceiling of ₹5,000 per month (₹60,000 annually).