HRA Exemption Calculator
Statutory Exemption Model under Rule 279 (Income-tax Act, 2025) & Section 10(13A) / Rule 2A (Income-tax Act, 1961)
HRA Exemption Calculator
1. Tax Year & Statutory Regime
Current Law: IT Act 20252. Statutory Salary Base Components
Annual Figures (₹)Include only Dearness Allowance that forms part of retirement/superannuation benefits per employment terms.
Commission should be considered only where it satisfies the applicable statutory definition and employment terms (fixed % of turnover per Gestetner Duplicators SC principle). Discretionary commission, incentives or bonuses are excluded.
3. HRA Received & Actual Rent Paid
4. Accommodation Location & City Classification
50% Limit ApplicableUnder Rule 279 (IT Rules, 2026), 8 specified cities qualify for the 50% salary limit (40% for all other locations):
Limit 2: Rent Paid − 10% of Salary (Excess Rent)
Eligible HRA Exemption is determined by the lowest of the three statutory amounts under Rule 279: ₹1,80,000.
Three Statutory Limits (Rule 279)Lowest Amount is Exempt
Total HRA received for relevant tenure
₹2,40,000 − ₹60,000 (10% Salary)
50% × ₹6,00,000 (Statutory Salary Base for HRA)
Statutory Salary Base & Input Summary
Income-tax Act, 2025 (Section 11) & Rule 279
Effective 1 April 2026, House Rent Allowance exemption is governed by Section 11 read with Schedule III (Table Sl. No. 11) of the Income-tax Act, 2025 and Rule 279 of the Income-tax Rules, 2026.
Income-tax Act, 1961 (Section 10(13A)) & Rule 2A
For FY 2025-26 (AY 2026-27), HRA exemption is computed under Section 10(13A) read with Rule 2A of the Income-tax Rules, 1962. Under this historical framework, the 50% limit applied exclusively to 4 designated metro cities (Mumbai, Delhi, Kolkata, Chennai), with all other cities subject to 40%.
Statutory Salary Composition
Salary = Basic Salary + Dearness Allowance (only where provided under terms of employment). All other allowances and perquisites are strictly excluded.
Gestetner Duplicators (P.) Ltd. v. CIT, (1979) 117 ITR 1 (SC)
Gestetner Duplicators (P.) Ltd. v. CIT, (1979) 117 ITR 1 (SC) (Judgment date: 14 December 1978), considered the meaning of salary in the context of remuneration/commission payable under the terms of employment and recognised that remuneration determined by reference to a fixed percentage of turnover may partake of the character of salary for the relevant statutory purpose.
Statutory Context & Qualification: This precedent arose under the Income-tax Act, 1961 and is cited here as supporting judicial authority on the character of contractual remuneration; the present HRA computation is governed by Section 11 read with Schedule III of the Income-tax Act, 2025 and Rule 279 of the Income-tax Rules, 2026.
Treatment of Commission: Commission should be considered only where it satisfies the applicable statutory definition and employment terms. The calculator does not automatically treat every commission, incentive or bonus as salary.
Step-by-Step Example Calculation Walkthrough
Basic Salary: ₹50,000/mo (₹6,00,000/yr) · HRA Received: ₹20,000/mo (₹2,40,000/yr) · Rent Paid: ₹20,000/mo (₹2,40,000/yr) · Location: Bengaluru (50% specified location in FY 2026-27).
• Limit A (HRA): ₹2,40,000
• Limit B (Rent - 10% Sal): ₹2.4L − ₹60k = ₹1,80,000
• Limit C (50% Location): 50% × ₹6L = ₹3,00,000
Eligible Exemption: ₹1,80,000 (Limit B Lowest)
Taxable HRA: ₹2,40,000 − ₹1,80,000 = ₹60,000 (taxable as salary).
Frequently Asked Statutory Questions (FAQs)
House Rent Allowance (HRA) exemption is a statutory tax benefit available to salaried individuals who receive HRA from their employer and incur actual rental expenditure for their residential accommodation. The exemption is computed by taking the minimum of three statutory limits, and only the excess HRA (if any) is included in taxable salary.
Statutory Disclaimer: This calculator provides an indicative computation based on the statutory inputs selected. It does not constitute a tax opinion or professional advice. Independent professional advice should be obtained for specific tax assessments.
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