HRA exemption under Section 10(13A) is available only in the Old Tax Regime. If you've opted for New Regime, check Section 80GG instead.
Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad, Ahmedabad
PAN Required: Your annual rent exceeds ₹1,00,000. Landlord's PAN must be submitted to your employer. From FY 2026-27, relationship with landlord must also be disclosed in Form 124.
Warning: Partial exemption
Only 60% of HRA is exempt (₹1,80,000/year). The rent-minus-10% formula is capping your exemption.
•Rent agreement should match the claimed period — IT dept cross-checks during scrutiny
•If you own a home and pay rent in another city, you can claim both HRA and home loan benefits
•Metro cities (Delhi, Mumbai, Chennai, Kolkata) get 50% of basic vs 40% for non-metro
Annual HRA Exemption
60% of HRA is tax-free
HRA is a salary component your employer pays to help cover your rental expenses. Under Section 10(13A) of the Income Tax Act, a portion of this HRA can be claimed as tax-exempt — but only if you actually live in rented accommodation and file under the Old Tax Regime.
If your employer doesn't provide HRA, or if you're self-employed, you can still claim rent deduction under Section 80GG — up to ₹5,000/month or 25% of adjusted total income, whichever is lower.
Your HRA exemption is the lowest of these three amounts:
Important: "Basic salary" here means Basic + Dearness Allowance (DA), but only when DA forms part of retirement benefit computation. Most private sector employees should enter DA as zero — it primarily applies to government and PSU employees.
FY 2025-26: Delhi, Mumbai, Chennai, Kolkata (4 cities at 50%).
FY 2026-27 onwards: Delhi, Mumbai, Chennai, Kolkata + Bengaluru, Pune, Hyderabad, Ahmedabad (8 cities at 50%). This change was officially notified under IT Rules 2026.
Paying rent to parents? Yes, you can claim HRA — provided your parents own the property and declare the rental income in their own ITR. Keep a proper rent agreement and make payments via bank transfer for audit trail.
Own a home + pay rent? You can claim both HRA exemption and home loan interest deduction (Section 24b) simultaneously — if the rented house is in a different city from your owned property, or if you can justify the need (e.g., office is far from owned property).
Both spouses paying rent? Both can claim HRA separately for their respective share of rent payments. Split the rent receipts accordingly.
House under construction? If you've taken a home loan but the house isn't ready yet, and you're renting another accommodation — you can claim HRA on the rent while also claiming pre-construction home loan interest (spread over 5 years after possession).
If your employer doesn't pay HRA (or you're self-employed), you can claim rent deduction under Section 80GG instead. The deduction is the least of: ₹5,000/month (₹60,000/year), 25% of adjusted total income, or rent paid minus 10% of adjusted total income. You must file Form 10BA with your ITR to claim this. You cannot claim both 10(13A) and 80GG.
You can pay rent to your parents and claim HRA — provided they own the property and declare the rental income in their ITR.
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