How is HRA tax exemption calculated under Section 10(13A)?

HRA tax exemption is the lowest of three amounts: 1) Actual HRA received from the employer; 2) 50% of Basic Salary + DA for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro cities; 3) Actual rent paid minus 10% of Basic Salary + DA.

Can I claim HRA under the New Tax Regime?

No. HRA exemption under Section 10(13A) is only available under the Old Tax Regime. The New Tax Regime offers lower slab rates and a higher standard deduction (₹75,000) but disallows HRA exemptions.

Salary Component • Tax Exemption

House Rent Allowance (HRA)

House Rent Allowance (HRA)is a standard component of an employee's gross salary package designed to offset accommodation expenses incurred while living in rented housing for employment purposes.

Statutory Exemption Rule: Section 10(13A)

Tax exemption is granted on the least of the following three figures:

1. Actual HRA amount received from employer

2. 50% of (Basic + DA) for Metros (or 40% for Non-Metros)

3. Actual Rent Paid − 10% of (Basic + DA)

Metro vs Non-Metro Classification

For the purpose of HRA taxation, the Income Tax Department strictly classifies only four cities as metros:

50% Metro Cap

Delhi NCR, Mumbai, Kolkata, and Chennai.

40% Non-Metro Cap

Bangalore, Hyderabad, Pune, Ahmedabad, Gurgaon, Noida, and all other Indian cities.

PAN Declaration & Proof Submission Rules

Annual Rent Exceeding ₹1,00,000: If annual rent exceeds ₹1 Lakh (approx ₹8,333/month), the landlord's PAN card number is mandatory for TDS exemption verification.
Rent Receipts: Rent agreements and monthly payment bank transfer proofs are required for audit trail under Section 192 verification.

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