If you switched cities mid-year — say a job transfer from Pune to Delhi — you can't apply one flat HRA formula to the whole year. The HRA exemption for two cities in a year has to be worked out separately for each period you lived in, then added up. Use the calculator below to run that period-wise math instantly.

What Is HRA Exemption for Two Cities in a Year?

You lived in two cities in the same financial year — usually a transfer, a new job, or a personal move — and you need HRA exemption calculated for each period separately, not as one flat annual number. This applies to corporate employees, government employees, and any salaried individual claiming HRA under the old tax regime. You split the year into periods, one per city, because the metro/non-metro rate, the rent, and sometimes the salary all change when you move.

HRA Exemption for Two Cities in a Year Formula (as per Section 10(13A), Income-tax Act, read with Rule 279, Income-tax Rules, 2026)

For each period (each city you lived in), the exempt HRA is the least of:

a) Actual HRA received during that period
b) Rent paid during that period − 10% of salary for that period
c) 50% of salary (metro city) or 40% of salary (non-metro city) for that period

Total annual exemption = Period 1 exemption + Period 2 exemption

This period-wise method is confirmed by the official Income-tax Rules, 2026 notification issued by CBDT, which governs HRA under Rule 279 (successor to the earlier Rule 2A). "Salary" here means Basic pay + Dearness Allowance (if it forms part of retirement benefits) + commission based on a fixed percentage of turnover — not your full CTC.

How This Calculator Works

1. Enter how many months you lived in City 1, whether it's a metro or non-metro city, your monthly Basic+DA, HRA received, and rent paid for that period.
2. Repeat the same four inputs for City 2 — the calculator checks that both periods together don't exceed 12 months.
3. It computes the three HRA exemption limits (actual HRA, rent minus 10% of salary, and 40%/50% of salary) separately for each period and picks the lowest of the three for each.
4. It adds the two period-wise exemptions to give your total annual HRA exemption, and shows the balance HRA that stays taxable.

Step-by-Step Example Calculation

Rohit worked in Pune (non-metro, but check the current metro list below) for 5 months, then transferred to Delhi (metro) for the remaining 7 months of FY 2026-27.

Period 1 — Pune, 5 months, non-metro (40%)

• Basic+DA: ₹50,000/month → total ₹2,50,000
• HRA received: ₹20,000/month → total ₹1,00,000
• Rent paid: ₹18,000/month → total ₹90,000
• a) Actual HRA received = ₹1,00,000
• b) Rent − 10% of salary = ₹90,000 − ₹25,000 = ₹65,000
• c) 40% of salary = ₹1,00,000
• Exempt for Period 1 = least of the three = ₹65,000

Period 2 — Delhi, 7 months, metro (50%)

• Basic+DA: ₹55,000/month → total ₹3,85,000
• HRA received: ₹27,500/month → total ₹1,92,500
• Rent paid: ₹30,000/month → total ₹2,10,000
• a) Actual HRA received = ₹1,92,500
• b) Rent − 10% of salary = ₹2,10,000 − ₹38,500 = ₹1,71,500
• c) 50% of salary = ₹1,92,500
• Exempt for Period 2 = least of the three = ₹1,71,500

Total annual HRA exemption = ₹65,000 + ₹1,71,500 = ₹2,36,500

Remaining taxable HRA = (₹1,00,000 + ₹1,92,500) − ₹2,36,500 = ₹56,000, which gets added to his taxable salary.

Before finalising your numbers, cross-check your overall tax position with our salary tax calculator — it shows your final take-home after this HRA exemption is applied.

Who Should Use HRA Exemption for Two Cities in a Year

• Corporate employees transferred between company offices during the financial year.
• Government employees who relocated on posting orders mid-year.
• CAs and company secretaries fixing Form 16 or filing an ITR that involves a mid-year relocation.
• Anyone who changed jobs and moved cities as part of a new offer.
• Anyone still deciding between the old and new tax regime — HRA only counts under the old regime, so check this before you choose.

Latest Rules You Should Know (2026)

• From FY 2026-27 (1 April 2026 onward), the metro list for the 50% HRA slab expanded from 4 to 8 cities: Delhi, Mumbai, Kolkata, Chennai, plus Bengaluru, Hyderabad, Pune, and Ahmedabad — notified under Rule 279 of the Income-tax Rules, 2026.
• If you're filing your ITR for FY 2025-26 (due by 31 July 2026, AY 2026-27), the old 4-city rule still applies — Bengaluru, Hyderabad, Pune, and Ahmedabad were still non-metro (40%) for that year. Don't backdate the new 8-city list.
• If your relocation this year crossed from an old-list non-metro city (e.g., Bengaluru) into a metro-list city, factor in the correct percentage for each period based on the financial year, not just the city name.
• HRA exemption, whichever year you're computing, is available only under the old tax regime. If you're on the new regime, your entire HRA is taxable — check with our old vs new regime calculator before assuming this exemption applies to you.

Common Mistakes People Make

• Applying one flat annual HRA formula instead of splitting the year into city-wise periods.
• Using the wrong metro/non-metro percentage for the wrong financial year — the 8-city list applies from FY 2026-27, not earlier years.
• Forgetting that "salary" for this formula is only Basic + DA (retirement-linked) + turnover commission, not gross CTC or special allowances.
• Not keeping separate rent receipts and rental agreements for each city, which HR or the assessing officer may ask for during verification.
• Assuming the transfer month counts fully in both cities — allocate each month to only one city based on where you actually lived and paid rent.
• Claiming HRA exemption after opting for the new tax regime, where it isn't allowed at all.

FAQs

Q1. Can I claim HRA exemption for two different cities in the same year? 

Yes. If you lived and paid rent in two cities during the same financial year — typically due to a transfer — you calculate HRA exemption separately for each period using that period's salary, rent, and city classification, then add the two exemptions together.

Q2. Do I need separate rent receipts for each city? 

Yes. Keep rent receipts, the rental agreement, and (if annual rent to one landlord exceeds ₹1,00,000) the landlord's PAN for each city separately, since your employer or the tax department may verify each period individually.

Q3. What if my salary also changed when I relocated? 

Use the actual Basic+DA applicable during each specific period, not an annual average. The formula is meant to be computed period-wise using the real salary, HRA, and rent for that period.

Q4. Is Bengaluru a metro city for HRA purposes in FY 2025-26? 

No. For FY 2025-26 (the year you're filing ITR for by 31 July 2026), only Delhi, Mumbai, Kolkata, and Chennai count as metro cities at 50%. Bengaluru, Hyderabad, Pune, and Ahmedabad move to the 50% metro slab only from FY 2026-27 onward.

Q5. Can I claim this exemption under the new tax regime? 

No. HRA exemption under Section 10(13A) is available only if you opt for the old tax regime. Under the new regime, the entire HRA received is fully taxable, regardless of how many cities you lived in.

Q6. What happens to the non-exempt HRA amount? 

Whatever portion of HRA is not exempt under the least-of-three formula for each period gets added back to your taxable salary and taxed at your applicable slab rate.

Related Tools on Toolisky

• Salary Tax Calculator India — see your full take-home after applying this HRA exemption.
• Old vs New Tax Regime Calculator — check whether the old regime (with HRA) actually saves you more.
• Salary Increment Calculator — model your take-home if your new-city salary comes with a raise.
• Gratuity Calculator — useful if your relocation also involved a job change and gratuity payout.
• Professional Income Tax Calculator India — for freelancers/consultants who aren't eligible for Section 10(13A) and should check Section 80GG instead.