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Next toolsAssumptions and methodology
Transparent calculation notes for HRA Calculator.
Formula used
Salary for HRA is basic salary plus dearness allowance, plus commission paid as a fixed % of turnover. The selected city and tax year determine whether the 50% or 40% limit applies.
Methodology
- Calculate salary for HRA from basic salary, dearness allowance and commission paid as a fixed % of turnover.
- For part of a year in the rented home, use that share of salary and HRA against the rent paid in those months.
- Compute the three statutory comparison values.
- Use the lowest value as exempt HRA and treat the balance as taxable HRA.
Core assumptions
- Amounts are yearly unless you choose monthly; a monthly figure is the payslip amount and counts × 12.
- Tax Year 2026-27 gives the 50% limit to eight named cities; FY 2025-26 gives it to four. Every other city uses 40%.
- The exemption applies only in the old tax regime; in the new regime all HRA received is taxable.
Not included
- Rent proof validation and employer payroll treatment are excluded.
- If rent, salary or city changes during the year, work out each period separately and add them.
- Final eligibility depends on documents and filing treatment.
About HRA Calculator
Guide1What is HRA Exemption?
House Rent Allowance (HRA) is a salary component that may be partly or fully exempt from tax when you receive HRA from your employer and pay rent for accommodation.
The exemption depends on salary, HRA received, rent paid, the rented home's city and the applicable tax year.
2HRA Exemption Formula
HRA exemption is the lowest of these three values:
- Actual HRA received
- Rent paid minus 10% of salary
- 50% of salary in the eight eligible cities for Tax Year 2026-27, or 40% elsewhere
Salary for HRA is basic salary, plus the dearness allowance that counts for retirement benefits, plus any commission paid as a fixed percentage of turnover. If you lived in the rented home for only part of the year, the rules use that share of salary and HRA against the rent paid in those months.
3How to Use This Calculator
- Step 1: Choose whether you enter the amounts per year or per month (your payslip figures)
- Step 2: Enter basic salary, dearness allowance, HRA received and rent paid; under More salary details, add commission paid as a fixed % of turnover and the months you lived in the rented home
- Step 3: Choose the city where you rent and the tax year
- Step 4: Review exempt HRA, taxable HRA, and the three-rule breakdown
If rent, salary or city changes during the year, work out each period separately and add them.
4Documents and Practical Checks
- Keep rent receipts and the rental agreement.
- Give your landlord's PAN if rent is more than ₹1,00,000 a year.
- From Tax Year 2026-27, declare HRA to your employer in Form 124 (it replaces Form 12BB) and state whether the landlord is related to you.
- HRA exemption is generally not available under the new tax regime
- Employer payroll treatment and final ITR claim should be reconciled carefully