3 Conditions — Lowest is ExemptRule 2A · Section 10(13A)
1
Actual HRA Received
As per salary slip / Form 16 Part B
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2
50% of Basic + DA
Metro city rate
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3
Rent Paid − 10% of Basic + DA
Actual expenditure less standard deduction
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Monthly Figures
HRA / month
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Exempt / month
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Taxable / month
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Old Tax Regime only — HRA exemption under Section 10(13A) is not available if you opt for the New Tax Regime. The entire HRA becomes taxable.
Compare both regimes
How HRA Exemption Works — Section 10(13A) & Rule 2A
House Rent Allowance (HRA) is one of the most commonly claimed tax exemptions by salaried employees in India. Under Section 10(13A) of the Income Tax Act, read with Rule 2A of the Income Tax Rules, a portion of HRA received from your employer is exempt from tax — provided you actually pay rent and opt for the Old Tax Regime.
The exempt amount is always the lowest of three conditions: actual HRA received, rent paid minus 10% of salary, and 50% (metro) or 40% (non-metro) of Basic + DA. You cannot choose — the law mandates the minimum.
Key points to remember:
HRA exemption is only available under the Old Tax Regime
If rent exceeds ₹1 lakh per year, landlord's PAN is mandatory
Rent to parents is allowed — but must be backed by agreement + bank payment + ITR declaration
From FY 2026-27: Bengaluru, Pune, Hyderabad and Ahmedabad upgraded to 50% metro rate
Frequently Asked Questions
FY 2025-26 (returns due July 2026): Only 4 cities at 50% — Delhi, Mumbai, Kolkata, Chennai. All others including Bengaluru, Pune, Hyderabad, Ahmedabad are at 40%.
FY 2026-27 onwards: Budget 2026 added 4 new metros — Bengaluru, Pune, Hyderabad, Ahmedabad now also get 50%. Total 8 cities at 50%.
Note: Noida and Gurugram are NOT Delhi — they are non-metro (40%) regardless of proximity to Delhi.
Yes — with proper documentation. Requirements:
• Rent agreement between you and your parents
• Actual payment via bank transfer (not cash)
• Parents declare rental income in their ITR
• You must not co-own the property
Rent to a spouse is not eligible for HRA exemption.
If annual rent exceeds ₹1,00,000 (monthly rent above ₹8,333), you must provide your landlord's PAN to your employer (in Form 12BB) and disclose it in your ITR.
If your landlord is an NRI, TDS at 31.2% must be deducted from rent and deposited with the government.
DA is included only if it forms part of retirement benefits (counted for PF/gratuity). Most private sector employees do not receive DA at all — leave it blank.
Government employees typically receive DA and it is part of retirement benefits — include it. When in doubt, check whether DA is considered for your PF contribution.
Yes — if the situations genuinely justify both. This is valid when:
• You own a house in one city but work and rent in another city
• Your owned house is not reasonably accessible from your workplace
You cannot claim HRA exemption if you live in your own house (even if you have a home loan on it).