Knowledge Base

HRA — House Rent Allowance Exemption

Exempt = Min of: (1) Actual HRA, (2) 50/40% of Basic, (3) Rent − 10% of Basic

Available ONLY under Old Tax Regime. New Regime does not allow HRA exemption.

50% of Basic+DA for metro cities (Delhi, Mumbai, Chennai, Kolkata). 40% for non-metro.

Actual rent paid minus 10% of Basic salary is a key component of the calculation.

Need rent receipts for HRA claim. PAN of landlord required if rent > ₹1L/year.

If you own a home but pay rent elsewhere (posted in different city), you can claim both HRA and home loan interest.

Pro Tip

If your employer doesn't give HRA but you pay rent, claim deduction under Section 80GG (up to ₹5,000/month).

HRA — House Rent Allowance Exemption - Complete Guide

Everything you need to know about HRA and how to optimize your financial strategy.

Understanding the Formula

The core calculation is based on:

Exempt = Min of: (1) Actual HRA, (2) 50/40% of Basic, (3) Rent − 10% of Basic

Key Concepts & Rules

Available ONLY under Old Tax Regime. New Regime does not allow HRA exemption.

50% of Basic+DA for metro cities (Delhi, Mumbai, Chennai, Kolkata). 40% for non-metro.

Actual rent paid minus 10% of Basic salary is a key component of the calculation.

Need rent receipts for HRA claim. PAN of landlord required if rent > ₹1L/year.

If you own a home but pay rent elsewhere (posted in different city), you can claim both HRA and home loan interest.

Expert Strategy

If your employer doesn't give HRA but you pay rent, claim deduction under Section 80GG (up to ₹5,000/month).

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