Deductions & ExemptionsJul 5, 2025
How is HRA exemption calculated under Section 10(13A) in India?
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House Rent Allowance (HRA) is a component of your salary that can be partially or fully exempt from tax under Section 10(13A) of the Income Tax Act. This exemption is only available under the old tax regime.
HRA exemption is the LOWEST of these three amounts:
- Actual HRA received from your employer
- 50% of basic salary (for metro cities: Delhi, Mumbai, Kolkata, Chennai) or 40% of basic salary (for non-metro cities)
- Rent paid minus 10% of basic salary
Example calculation:
Say your monthly basic salary is ā¹50,000, HRA received is ā¹20,000, and you pay rent of ā¹18,000 in Bengaluru (non-metro).
| Component | Amount (monthly) |
|---|---|
| Actual HRA received | ā¹20,000 |
| 40% of basic salary | ā¹20,000 |
| Rent paid minus 10% of basic | ā¹18,000 - ā¹5,000 = ā¹13,000 |
The exemption is the lowest: ā¹13,000/month (ā¹1,56,000/year). The remaining ā¹7,000/month of HRA is taxable.
Documents you need:
- Rent receipts (monthly or quarterly) with revenue stamps for rent above ā¹5,000/month
- Rent agreement/lease deed
- Landlord's PAN if annual rent exceeds ā¹1,00,000
Special cases:
- If you own a house in a different city but pay rent where you work, you can claim both HRA exemption and home loan interest deduction (Section 24)
- If you pay rent to your parents, you can claim HRA (ensure they declare rental income)
- If your employer does not provide HRA, you can claim deduction under Section 80GG (up to ā¹5,000/month) for rent paid
Not available under the new regime. If you switch to the new tax regime, HRA exemption cannot be claimed.
HRAexemptionrentSection-10-13AIndia
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Disclaimer: This information is for general educational purposes and is not professional tax advice. Tax situations vary. Consult a qualified tax professional for advice specific to your circumstances.