How HRA exemption is calculated

The exempt amount is the lowest of three figures:

  • the HRA actually received from your employer;
  • rent paid minus 10% of your basic salary plus dearness allowance;
  • 50% of basic + DA if you live in Delhi, Mumbai, Kolkata or Chennai, or 40% elsewhere.

HRA exemption is only available under the old tax regime. If you don't receive HRA but pay rent, you may be able to claim a separate deduction for rent paid, subject to conditions.