s.10(13A) · Rule 2A · old regime only
HRA exemption — least of three
Your HRA is tax-free only up to the lowest of three numbers. Enter your salary components and rent; the tool shows all three, picks the exemption, and tells you what stays taxable.
The rule this tool applies
- Least of three (Rule 2A): (a) HRA actually received; (b) rent paid minus 10% of salary; (c) 50% of salary in a metro, 40% elsewhere. "Salary" = basic + DA (if it counts for retirement benefits) + commission on turnover.
- Old regime only — the new regime has no HRA exemption; the allowance is fully taxable there.
- Landlord's PAN is required by your employer when annual rent exceeds ₹1,00,000; rent above ₹50,000 a month also needs 2% TDS by you (s.194-IB).
- Metro list: the four metros of Rule 2A. Reports of an expansion (Hyderabad, Pune, Ahmedabad, Bengaluru) for tax year 2026-27 are single-source so far — we'll add them when the Rules text confirms.
- Own house / no rent — no exemption; paying rent to parents is allowed if genuine and they declare it.
Worked example
Basic ₹50,000, HRA ₹20,000, rent ₹18,000 in Bengaluru (non-metro, 40%): (a) ₹20,000; (b) ₹18,000 − ₹5,000 = ₹13,000; (c) ₹20,000. Least is ₹13,000 a month — ₹1,56,000 a year exempt, ₹84,000 taxable. The same person in Mumbai gets (c) = ₹25,000, and the exemption is still ₹13,000 — rent, not city, is the binding constraint here.
Edge cases to know
- Changed rent or city mid-year: compute month by month (or period by period) — the tool works on monthly figures for that reason.
- No HRA in your pay? Self-employed and HRA-less employees can claim s.80GG instead — up to ₹5,000 a month, old regime only.
- Rent to spouse is generally not accepted; to parents, with rent receipts and their ITR, is.
Related tools
- Rent receipt generator — the proof your employer asks for.
- Old vs new regime comparator — does HRA tip the balance?
Last verified: 18 September 2026 — s.10(13A) and Rule 2A formula; ₹1 lakh PAN rule and s.194-IB threshold unchanged · Not tax advice.