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About this tool
Compare your Rule 2A house rent allowance exemption at the 50% metro cap against the 40% non-metro cap, and see the tax the difference is worth.
This tool shows how much of your house rent allowance stays tax-free in a metro city versus anywhere else, by running Rule 2A of the Income-tax Rules twice on the same salary. Rule 2A exempts the least of three amounts — the HRA actually received, rent paid minus 10% of salary, and 50% of salary in Delhi, Mumbai, Kolkata or Chennai (40% everywhere else) — so the city rate only changes the answer when the percentage cap is the binding one. It is for salaried employees under the old tax regime who are relocating, comparing offers, or checking what their landlord's city costs them at tax time.
Open Metro vs Non Metro HRA Impact on AltFTool — it loads instantly in your browser.
Enter the values you already know.
Fine-tune the options to match your scenario.
Read the result and use it in your planning or reporting.
See the actual HRA, the rent-minus-10% figure and the percentage cap side by side, and which one is binding.
Converts the exemption gap into rupees of tax at your slab plus the 4% health and education cess.
Tells you the monthly rent below which the metro and non-metro answers are identical on your salary.
Only four: Delhi, Mumbai, Kolkata and Chennai. Rule 2A names them specifically, so Bengaluru, Hyderabad, Pune, Ahmedabad, Gurugram and Noida all use the 40% rate even though they are large cities. Living in Delhi qualifies; living in Noida or Gurugram does not.
The exemption is the lowest of three figures: the HRA actually received, the rent you paid minus 10% of salary, and 50% of salary for the four metro cities or 40% of salary elsewhere. 'Salary' means basic pay plus dearness allowance that counts for retirement benefits plus commission fixed as a percentage of turnover — no other allowance.
Only the difference between the two caps, and only when that cap is the binding limit. On a basic of ₹60,000 a month with ₹30,000 HRA and ₹35,000 rent, the metro exemption is ₹3,48,000 against ₹2,88,000 non-metro — a ₹60,000 gap worth ₹18,720 at the 30% slab plus 4% cess. If your rent is low or your HRA is small, the gap is zero.
No. Section 115BAC, the default regime from AY 2024-25, withdraws the section 10(13A) HRA exemption along with most other deductions. You have to opt for the old regime to claim it, so compare the total tax under both regimes before deciding.
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