Exempt and taxable HRA from the least of three limits, with the limit that applies named.
Your HRA exemption is the least of three amounts: the HRA you receive, the rent you pay minus 10% of your salary, and 50% of your salary in a metro city or 40% anywhere else. With a basic salary plus DA of ₹50,000 a month, HRA of ₹20,000 and rent of ₹18,000 in a metro city, the three amounts for the year are ₹2,40,000, ₹1,56,000 and ₹3,00,000. The least is ₹1,56,000, so that much is exempt and the remaining ₹84,000 of HRA is taxable. The page names the limit that applies, because it tells you what to change. If rent is the lowest, paying more rent raises the exemption. If the HRA you receive is the lowest, extra rent does nothing. If the salary share is the lowest, only a higher salary or a metro address moves it. Salary here means basic pay plus dearness allowance when your pay terms include it. Other allowances and perquisites are not counted.
From 1 April 2026 the 50% limit applies to Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru. Before that date only the first four counted, so a person in Bengaluru, Hyderabad, Pune or Ahmedabad was limited to 40% of salary. The change is in Rule 279 of the Income-tax Rules, 2026, which replaced Rule 2A of the 1962 Rules. The page uses two choices, metro city and any other place. Nearby towns such as Gurugram or Noida are not on the list, so choose any other place for them. The exemption itself comes from Schedule III of the Income-tax Act, 2025 (Table, Sl. No. 11), which replaced section 10(13A) of the 1961 Act. The rent must be paid for a home you do not own.
HRA exemption is available only if you choose the old tax regime. Section 202 of the Income-tax Act, 2025 (earlier section 115BAC) refuses it in the new regime, which is the default. To see whether the exemption is worth keeping the old regime, carry the exempt amount into the income tax calculator on this site and compare. This page assumes the same salary, HRA and rent in every month of the year. If you moved house, changed city or got a raise part-way, work out each period and add them. It does not model rent paid to a relative, landlord PAN requirements, or HRA from more than one employer. The rules are as of 22 October 2026. It follows the notified Rule 279 as reproduced in public summaries and a KPMG alert, so check the final rule text for your own filing. The result is an estimate, not tax advice, and nothing you type is stored or sent.
The exempt HRA is the least of: the HRA actually received; rent paid minus 10% of salary; and 50% of salary for the eight metro cities or 40% elsewhere. For salary ₹6,00,000, HRA ₹2,40,000 and rent ₹2,16,000 in a metro city, the amounts are ₹2,40,000, ₹1,56,000 and ₹3,00,000, so ₹1,56,000 is exempt.
Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, under Rule 279 of the Income-tax Rules, 2026, in force from 1 April 2026. Earlier only Mumbai, Delhi, Kolkata and Chennai had the 50% limit. Every other place is 40%.
No. HRA exemption applies only under the old regime. In the new regime the whole HRA is taxed as salary, even if you pay rent. The page shows the taxable HRA in case you stay in the old regime.
Basic pay plus dearness allowance if your terms of employment include DA, plus any commission paid as a fixed percentage of turnover. Bonus, special allowance, conveyance and other allowances and perquisites are left out, so using your gross pay would overstate the limits. A basic of ₹50,000 a month gives 10% = ₹5,000 a month; with ₹10,000 a month of turnover commission, salary is ₹60,000 and 10% is ₹6,000.
Only if rent is above 10% of salary. With salary ₹50,000 a month, rent of ₹5,000 or less gives a rent limit of zero, so nothing is exempt and the full HRA is taxed. At rent ₹10,000 the rent limit is ₹5,000 a month.
No. The exemption needs rented accommodation that you do not own and rent you actually pay. If you pay rent in one city and own a home elsewhere, the exemption can still apply for the rented home you occupy.