How HRA exemption is calculated
Under section 10(13A) of the Income Tax Act, the exempt part of your HRA is the lowest of these three amounts:
- The actual HRA you received
- Rent paid minus 10% of basic salary (+ DA)
- 50% of basic salary for metro cities, or 40% for non-metro cities
The rest of your HRA is added to your taxable income.
Important points
- HRA exemption is available only under the old tax regime. Compare both regimes with the income tax calculator.
- If yearly rent exceeds ₹1 lakh, you must give your employer the landlord's PAN.
- Keep rent receipts or a rent agreement as proof.
- You can't claim HRA for a house you own and live in.