The exempt part is the lowest of the HRA received, rent paid minus 10% of salary, or 50% of salary in listed metro cities (40% elsewhere). From FY 2026-27, Bengaluru, Hyderabad, Pune and Ahmedabad join Delhi, Mumbai, Kolkata and Chennai in the 50% list. HRA exemption is not available under the new regime.
Finance glossary
What is House rent allowance (HRA)?
A salary allowance for rent, part or all of which is tax-free under the old regime if you live in rented accommodation.