Calculate your House Rent Allowance exemption under Section 10(13A) — for the old tax regime
Metro: Mumbai, Delhi, Kolkata, Chennai
Monthly HRA Exemption
₹13,000
Taxable HRA
₹7,000/mo
Annual Tax Saving
₹48,672
Exemption = Minimum of:
HRA (House Rent Allowance) is a component of your salary specifically intended to cover your rental costs. Under Section 10(13A) of the Income Tax Act, a portion of the HRA you receive from your employer is exempt from income tax — but only if you are actually paying rent for accommodation.
The tax-exempt portion of HRA is the minimum of three calculated values. This rule ensures that the exemption is proportionate to your actual situation — you cannot claim a large exemption if you pay very little rent, if your city is non-metro, or if your employer pays you a small HRA relative to your salary.
Actual HRA Received
The total HRA amount your employer credits to you each month. This is stated in your salary slip.
50% / 40% of Basic Salary
For metro cities (Mumbai, Delhi, Kolkata, Chennai): 50% of your basic salary. For all non-metro cities: 40% of basic salary.
Actual Rent Paid minus 10% of Basic
Subtract 10% of your basic salary from your monthly rent. Only the amount above this threshold counts toward exemption.
Practical Tip: Maximise Your HRA Exemption
To maximise HRA exemption, ensure your rent paid exceeds 10% of your basic salary (otherwise condition 3 becomes ₹0). If your rent equals 40–50% of your basic, you will typically exhaust the available exemption and pay zero tax on your HRA.
For HRA exemption purposes, metro cities are Mumbai, Delhi, Kolkata, and Chennai. For these cities, the exemption is 50% of basic salary. For all other cities (Bengaluru, Hyderabad, Pune, Ahmedabad, etc.), the limit is 40% of basic salary, even though these are large cities.
Yes, you can pay rent to your parents and claim HRA exemption, but only if your parents own the property. You must enter into a proper rent agreement, pay actual rent by bank transfer, and your parents must declare this rental income in their ITR. Rent paid to spouse is not allowed.
No. HRA exemption under Section 10(13A) is available only under the old tax regime. If you opt for the new tax regime, you cannot claim HRA exemption regardless of how much rent you pay.
If your annual HRA claim exceeds ₹1 lakh, you must submit rent receipts and the PAN card of your landlord to your employer for TDS purposes. For amounts below ₹1 lakh, receipts are generally not required by the employer, though you should keep them for your own records.