HRA exemption formula
Under Section 10(13A), the HRA exemption is the minimum of:
- Actual HRA received
- 50% of (Basic + DA) for metro cities, or 40% for non-metro
- Rent paid minus 10% of (Basic + DA)
Exemption = MIN(HRA received, 50%/40% of salary, Rent − 10% of salary)
The taxable HRA = HRA received − exemption amount.
FAQ
Which cities are considered metro for HRA?
Delhi, Mumbai, Chennai, and Kolkata are classified as metro cities for HRA purposes (50% of salary). All other cities get 40%.
Can I claim HRA without rent receipts?
For annual rent above ₹1,00,000, you must provide rent receipts and the landlord's PAN. Below ₹1 lakh, a declaration is usually sufficient.
Is HRA available in the new tax regime?
No. HRA exemption under Section 10(13A) is only available under the old tax regime. The new regime does not allow this deduction.