See what you qualify for
Free tool

HRA exemption calculator

See the actual HRA figure, the rent-based figure and the salary-based figure side by side — and which one caps your exemption.

₹1,80,000exempt
Actual HRA received
₹3,00,000
Rent paid, less 10% of salary least — this binds
₹1,80,000
50% of salary
₹3,00,000
Exemption (the least of the three)
₹1,80,000
Taxable HRA balance
₹1,20,000

Salary for this rule is basic pay + DA-in-terms only — ₹6,00,000 over this period — never the full CTC.

What is capping your exemption. Your rent is the binding limb. The rule ignores the first 10% of salary you spend on rent — only what you pay above that counts — so the exemption tracks rent, not the HRA on your payslip. Paying more rent raises it; paying less lowers it.

Put simply: the exemption is the smallest of three numbers, so the smallest one is always the one to change. The floor: if your rent for the period is at or below 10% of basic pay + DA, the exemption is nil no matter how big the HRA in your package. The ceiling: it can never exceed 50% of basic pay + DA for your city, nor the HRA you were actually paid.

An estimate, not a quote. Your employer's TDS computation, or your assessing officer, produces the figure that actually applies to you — check there before you rely on a number. If salary, HRA, rent or city changed partway through the year, run this once per stable period and add the exemption figures — rule 2A is applied period by period, not on a single annual average.

Why isn’t there a turnover-commission field?

Rule 2A’s salary also includes commission received as a fixed percentage of turnover, on top of basic pay and DA-in-terms. It applies to very few salary structures, so if it applies to yours, add it into the basic + DA figure above by hand rather than tracking a field almost nobody needs.

Would you rather we handled it?Getting HRA, allowances and the regime choice right on a payslip is exactly the kind of detail that saves tax quietly, every month.
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Why the exemption is the smallest of three numbers

Section 10(13A) does not simply exempt whatever HRA your employer pays you. It caps the exemption at the least of three separate figures, so that neither a generous HRA component nor cheap rent, on its own, can inflate the exemption:

  • Actual HRA received — you can never exempt more than what your employer actually paid you as HRA.
  • Rent paid minus 10% of salary — only the rent you pay above a 10%-of-salary floor counts; the first 10% is treated as something you would spend on housing regardless.
  • 50% or 40% of salary — a ceiling tied to salary and city, so a very high rent in a small salary bracket does not exempt an unlimited amount.

Seeing all three side by side, rather than only the final exempt figure, is what tells you which lever actually moves your number — raising declared rent only helps if the rent-based figure is currently the smallest of the three.

This only applies if you have opted for the old tax regime. Under the new regime the exemption is not available at all, and none of the three figures above matter.

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