HRA exemption
House rent allowance
The part of your house rent allowance that's tax-free in the old regime when you pay rent.
It's the lowest of: the HRA you receive; rent paid minus 10% of salary (basic + DA); and 50% of salary in the eight metro cities (Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad from tax year 2026-27) or 40% elsewhere.
There's no HRA exemption in the new regime.
Example
Basic ₹50,000, HRA ₹20,000, rent ₹25,000 a month in Pune: ₹20,000 a month is exempt.
HRA Exemption Calculator
How much of your house rent allowance is tax-free, with the new 8-city metro rule.
Related terms
Rules as of tax year 2026-27. Written by the Welthr team; last reviewed on . Not financial advice.