How this calculation works
For tax year 2026–27, rule 279 lists eight residential locations for the 50% salary cap; the cap elsewhere is 40%. Compare actual HRA, non-negative rent above 10% of qualifying salary and the location cap for the same rental period. Under section 202 the new regime does not grant this HRA exemption.
Old-regime exemption = max(0, min(actual HRA, rent − 10% salary, location cap × salary))A worked example
With unchanged monthly qualifying salary ₹50,000, HRA ₹25,000 and rent ₹35,000 for twelve months in Chennai, the limits are ₹3,00,000, ₹3,60,000 and ₹3,00,000. The old-regime exemption estimate is ₹3,00,000.
Good to know
Current tax year 2026–27 only; older periods can have a different city list. No proof-of-rent, employer acceptance, salary classification, partial-month eligibility or final income-tax calculation. Use separate calculations for periods with changed facts. Exemption is not the tax saved.
Reference: Income-tax Rules 2026: rule 279 (opens in a new tab) ↗
Use the correct tax-year rule
This page is scoped to tax year 2026–27. Rule 279 of the notified Income-tax Rules 2026 lists Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru for the 50% location cap; other locations use 40%.
The new regime does not grant the HRA exemption covered by Schedule III item 11. Choosing it therefore produces zero exemption here. This page does not choose a regime or compare a person’s complete tax liabilities.
The resident rent TDS calculator estimates a supported tenant withholding case; it does not calculate the allowance exemption on this page.
Read more: Income-tax Act 2025: section 202, new regime exclusions (opens in a new tab) ↗
Compare three amounts for one unchanged period
The arithmetic compares actual HRA, actual rent above 10% of qualifying salary, and the location-based salary cap. All three must describe the same period. Negative rent excess is treated as zero.
For qualifying salary ₹50,000, HRA ₹25,000 and rent ₹35,000 monthly for twelve months in Chennai, the three limits are ₹3,00,000, ₹3,60,000 and ₹3,00,000. The least is ₹3,00,000. Moving the unchanged example to an other-location cap reduces that third limit to ₹2,40,000.
Qualifying salary and actual evidence matter
Do not copy a CTC figure into the salary field. Enter the qualifying salary basis for HRA, including DA only as provided under the employment terms and excluding unrelated allowances and perquisites. Confirm classification with payroll.
If salary, rent, HRA or residential location changes, calculate consistent subperiods rather than averaging facts that can change which limit is smallest. The percentage calculator can check a cap; a resident rent TDS calculator addresses a separate tenant-withholding question, not HRA exemption.
A few questions, answered
Can I use this for an earlier financial year?
No. This page deliberately uses the tax year 2026–27 rule and eight-city list. Earlier periods need their applicable law and city definition.
Is the exemption amount the income tax saved?
No. It is the modeled amount of HRA excluded in the supported old-regime comparison. Final tax depends on the person’s complete tax calculation.
Does paying rent automatically prove my claim?
No. Eligibility, salary classification, evidence and employer or tax-authority acceptance are outside this arithmetic model.