HRA Exemption Calculator 2026-27 & FY 2025-26 (Free Tool)

 

Salary & tax

HRA exemption calculator

Work out how much of your HRA is tax-exempt under the old regime, for Tax Year 2026-27 or FY 2025-26. Enter your salary, rent and city and we apply the three-condition rule automatically. Nothing you type is sent anywhere.

1

Which year are you filing for?

Tax year

Tax Year 2026-27 (current)

FY 2025-26 (earlier tax year)

The 50% city list changed for Tax Year 2026-27. Use FY 2025-26 for income earned between 1 April 2025 and 31 March 2026, it still follows the older 4-city rule.

2

Salary, HRA and rent

How are you entering amounts?

Monthly

Total for period

Enter monthly amounts. We multiply them by the occupied months below to get your period figure, and separately show a 12-month projection at that same monthly rate.

Basic salary

₹

HRA received

₹

Eligible dearness allowance (DA)

₹

Count this DA towards salary for HRA

Only tick this if your DA is provided for under the terms of your employment. Other allowances and perquisites never count towards this salary figure.

Salary for HRA can also include commission based on a fixed percentage of turnover, if your employment contract provides for it. This calculator doesn't model that separately for either year, add it to basic salary above if it applies to you.

Rent paid

₹

Months occupied Out of 12. Use less than 12 if you moved, changed cities, or started renting partway through the year.

Accepts commas, the ₹ symbol and shorthand such as 50k, 1L or 1.5Cr.

3

City and living situation

City you rent in

Tax regime

Old regime

New regime

I own and live in this accommodation (not paying rent)

Illustrative amounts are prefilled. Press Enter in any field, or Calculate, to see your own result.

✓

Documents to keep ready

• A signed rent agreement covering the period you're claiming.
• Rent receipts or other proof of payment (bank transfer, UPI record) for each month.
• Your landlord's PAN if your annual rent exceeds ₹1,00,000, given to your employer along with your rent details.
• Form 124, the landlord relationship and rent disclosure you submit to your employer, not the income tax portal (this replaced the earlier Form 12BB).

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Worked example

A salaried employee in Bengaluru, basic salary ₹40,000/month, HRA ₹22,000/month, rent ₹25,000/month, DA not counted, old regime, full year.

The only difference between the two columns is the city-list rule for the year. Bengaluru moved from the 40% group to the 50% group for Tax Year 2026-27, which is why the same salary, HRA and rent produce a different exempt amount.

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Frequently asked questions

What are the three conditions for HRA exemption?

Your exempt HRA is the lowest of three amounts: the actual HRA you receive, your rent paid minus 10% of your salary, and 50% or 40% of your salary depending on your city. Whichever of the three is lowest becomes your exemption, and the rest of your HRA is taxable.

What is 50% or 40% of salary for HRA?

It's one of the three limits on your exemption. If you live in a city on the 50% list for the year you're filing, your location limit is half your salary; everywhere else it's 40%. "Salary" here means basic pay plus DA, but only if that DA is part of your employment terms.

How do I calculate HRA on basic salary in Excel?

Use one formula with your basic salary (plus eligible DA) as Base: =MAX(0,MIN(HRA,Rent-0.1*Base,LocationRate*Base)), where LocationRate is 0.5 or 0.4. This returns your exempt HRA directly; subtract it from HRA received to get the taxable portion.

Which cities get 50% HRA in Tax Year 2026-27, and how is that different from FY 2025-26?

Tax Year 2026-27 lists eight cities at 50%: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. For FY 2025-26, only the first four are at 50%; Bengaluru, Hyderabad, Pune and Ahmedabad are still 40% for that year. Every other location is 40% in both years.

Can I claim HRA under the new tax regime?

No. HRA exemption under the salary rules is not available under the new tax regime, so your full HRA is taxable there regardless of rent or city. Compare both regimes on the Income Tax Calculator before deciding which one to file under.

Can I claim HRA if I rent from a relative?

Genuine arrangements are allowed. The rent has to be real, actually paid, and properly documented, and it now goes through the same Form 124 disclosure as any other landlord. Arrangements that exist only on paper, with no real payment, don't qualify and can be challenged.

What documents do I need?

Keep the rent agreement, rent receipts or payment evidence, your landlord's PAN if annual rent exceeds ₹1,00,000, and Form 124 disclosing the landlord relationship. Your employer needs these to allow the exemption in your TDS.

Sources: Income-tax Rules, 2026 (Rule 279) and the Form 124 FAQ, Income Tax Department, Government of India, at incometax.gov.in. Last reviewed: September 2026. This tool is for information and estimation only and is not tax, legal or financial advice. Read the disclaimer and the methodology and sources page. See also the Income Tax Calculator to compare your total tax under both regimes.