Salaried rent, old regime

HRA in metro cities: the three-way minimum

House rent allowance is exempt only to the least of three figures: the HRA you actually received, rent minus 10% of basic, and 50% of basic in a metro (40% elsewhere). That is why two colleagues with the same CTC can have different taxable income after they move from Indore to Mumbai.

The metros that get 50%

For this exemption, Delhi, Mumbai, Kolkata and Chennai are the classic metros in the Income Tax rule most payroll teams still apply. Bengaluru, Hyderabad and Pune may feel metropolitan in rent, but the 50% cap is not a vibe check — it is a list. If you live in a non-metro, the third cap is 40% of basic salary.

Rent paid to a parent can be valid in principle if it is real rent, documented, and the parent reports it. Payroll will usually want rent receipts and, above a threshold, the landlord’s PAN. IndiaKit will not collect those documents. We only run the three-way minimum so you can see whether your current rent even matters.

New regime versus old

HRA exemption is an old-regime story. If you are fully in the new regime, this calculator is a what-if, not a line on your current return. Run the tax tool both ways. Confirm the year’s rules in the Income Tax Department’s documentation before you tell payroll to switch.