What are the three conditions for HRA exemption?

HRA exemption under Section 10(13A) is the minimum of: (1) Actual HRA received from employer, (2) 50% of Basic+DA for metro cities (Mumbai, Delhi, Kolkata, Chennai) or 40% for non-metro, (3) Actual rent paid minus 10% of Basic+DA. You pay tax on whichever is highest among the three.

Can I claim HRA if I live with my parents?

Yes, but only if you genuinely pay rent to your parents. You must: enter into a proper rent agreement, transfer money via bank (not cash) to your parents, and your parents must declare this as rental income in their returns. Paying rent to parents is legal and common, but must be backed by proper documentation. Rent cannot be paid to your spouse.

Can I claim both HRA exemption and home loan deduction?

Yes! If you own a house in one city but work and rent in another city, you can claim both HRA exemption (on rent paid) and home loan deduction under Section 24(b) (up to ₹2L on interest). This is common for people who own property in their hometown but work and rent in a different city.

Section 10(13A) · Old Regime · FY 2025-26

HRA Calculator

Q: Is HRA available under the new tax regime?

No. HRA exemption under Section 10(13A) is only available under the old tax regime. If you opt for the new regime (which has lower slab rates), you cannot claim HRA exemption. This is one of the key factors to compare when deciding between old and new regime.

Calculate your HRA exemption under Section 10(13A), taxable HRA, and exact tax saving — for metro and non-metro cities. FY 2025-26 rules applied.

📚 Understand This Calculator

What is HRA exemption? The 3-condition rule most salaried Indians get wrong

HRA (House Rent Allowance) is a component of your salary meant to cover rent. Under Section 10(13A), a portion of HRA is exempt from tax — but the exempt amount is the minimum of three specific conditions, not the full HRA received. Most people assume their entire HRA is tax-free. It isn't.

🇮🇳 Real-Life Example

Priya works in Bangalore (Metro). Monthly: Basic ₹50,000 | DA ₹5,000 | HRA received ₹25,000 | Rent paid ₹22,000.

📌 Condition 1 — Actual HRA received: ₹25,000/month → ₹3,00,000/year

📌 Condition 2 — 50% of Basic+DA (metro): 50% × ₹55,000 = ₹27,500/month → ₹3,30,000/year

📌 Condition 3 — Rent paid minus 10% of Basic+DA: ₹22,000 − ₹5,500 = ₹16,500/month → ₹1,98,000/year

✅ Exempt HRA = minimum = ₹1,98,000/year. Taxable HRA = ₹3,00,000 − ₹1,98,000 = ₹1,02,000

💰 If Priya pays rent of ₹30,000 instead: Condition 3 = ₹24,500/mo → ₹2,94,000/year. Exempt = ₹2,94,000. Tax saved at 30%: ~₹28,080 more!

💡 The Key Insight

Condition 3 (rent minus 10% of basic) is usually the binding constraint. To maximise HRA exemption, pay higher rent. If your rent is below 10% of basic+DA, you get zero HRA exemption — even if your employer gives you a large HRA. This is why many people are surprised to find they owe tax on their HRA despite paying rent.

⚠️ Common Mistake

HRA exemption only applies under the old tax regime. If you switched to the new regime for lower tax rates, your entire HRA received is taxable. Run the Old vs New Tax Regime calculator to check if the HRA exemption (and other deductions) make the old regime worth it for you.

🏠 Your Salary & Rent Details

Basic Salary (Monthly, ₹)

Dearness Allowance — DA (Monthly, ₹)

Leave 0 if not applicable (most private sector employees)

HRA Received from Employer (Monthly, ₹)

Rent Actually Paid (Monthly, ₹)

City Type

Your Tax Slab (Old Regime)

🏠

Enter your details

See HRA exemption, taxable HRA & tax saved

HRA Exemption Reference

Annual HRA exemption at different rent levels (Basic ₹50K/mo, HRA received ₹20K/mo, Non-metro)

Monthly Rent	Condition 1	Condition 2	Condition 3	Exempt (Min)
₹5,000/mo	₹2.4L	₹2L	₹0	₹0
₹10,000/mo	₹2.4L	₹2L	₹60,000	₹60,000
₹15,000/mo	₹2.4L	₹2L	₹1.2L	₹1.2L
₹20,000/mo	₹2.4L	₹2L	₹1.8L	₹1.8L
₹25,000/mo	₹2.4L	₹2L	₹2L (capped by C2)	₹2L

Frequently Asked Questions

What are the 3 conditions for HRA exemption under Section 10(13A)? ▾

HRA exemption = minimum of: (1) Actual HRA received from employer, (2) 50% of Basic+DA for metro cities or 40% for non-metro cities, (3) Actual rent paid minus 10% of Basic+DA. You get the lowest of these three as exempt. The balance is added to taxable income.

Can I claim HRA if I pay rent to my parents? ▾

Yes, but properly. You must: sign a rent agreement with your parents, pay rent by bank transfer (not cash), and your parents must show this rental income in their ITR. The arrangement must be genuine — not a paper transaction. Paying rent to spouse is not allowed. Paying rent to parents is legal and widely used.

Can I claim HRA and home loan deduction together? ▾

Yes! If you own a house in City A and rent in City B for work, you can claim both: HRA exemption on rent paid in City B, and home loan interest deduction (Section 24b, up to ₹2L) + principal repayment (Section 80C) for your house in City A. Both claims must be genuine and documentable.

Is HRA available under the new tax regime? ▾

No. HRA exemption is only available under the old tax regime. If you opt for the new regime, your full HRA received is taxable. Before choosing a regime, calculate your total deductions (HRA + 80C + 80D + home loan) — if they exceed the standard deduction advantage of the new regime, the old regime may save you more tax.

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