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—hra-exemption-calculation-section-10-13a-india [2026/07/22 17:47] (current) – created - external edit 127.0.0.1
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 +{{htmlmetatags>metatag-description=(Learn how to calculate your HRA exemption under Section 10 13A using the least-of-three rule, the metro 50 percent vs 40 percent split, and old-regime rules.)&metatag-keywords=(HRA exemption calculation, Section 10 13A, how to calculate HRA exemption India, HRA metro cities, landlord PAN HRA)&metatag-robots=(index,follow)&metatag-og:title=(HRA Exemption: How to Calculate and Claim It - Section 10 13A)&metatag-og:description=(Learn how to calculate your HRA exemption under Section 10 13A using the least-of-three rule, the metro 50 percent vs 40 percent split, and old-regime rules.)&metatag-og:type=(article)}}
 +====== HRA Exemption: How to Calculate and Claim It - Section 10(13A) ======
 +
 +
 +{{ :social:auto:hra-exemption-calculation-section-10-13a-india.png?direct&1200 |HRA Exemption: How to Calculate and Claim It - Section 10(13A) — RTI Wiki}}
 +
 +If you are a salaried person paying rent, your House Rent Allowance (HRA) is not fully taxed. Section 10(13A) of the Income-tax Act, 1961, read with Rule 2A, exempts the lowest of three set amounts, and the rest is added to your taxable salary.
 +
 +<WRAP info>
 +**Quick Reply:** Your HRA exemption is the least of three figures: the actual HRA you received, your rent paid minus 10 percent of salary, and 50 percent of salary if you live in Delhi, Mumbai, Kolkata or Chennai (40 percent everywhere else). It is available only under the old tax regime.
 +</WRAP>
 +
 +===== Who can claim the HRA exemption =====
 +
 +The exemption under Section 10(13A) is for **salaried employees** who:
 +
 +  * actually receive an HRA component as part of their salary, and
 +  * pay rent for the home they live in, and
 +  * do not own the home they are claiming rent on.
 +
 +If your salary slip has no HRA line at all, Section 10(13A) does not apply to you. In that case you may instead look at the rent deduction under Section 80GG: see https://righttoinformation.wiki/section-80gg-rent-deduction-no-hra-india for the rules and limits.
 +
 +One more thing to fix in your head before any maths: **HRA exemption is available only under the old tax regime.** Since FY2023-24 the new regime is the default, and it removes most exemptions including HRA. So if you want this benefit when you file the return due by 31 July 2026 (for FY2025-26 / AY2026-27), you must opt for the old regime.
 +
 +===== The least-of-three rule under Rule 2A =====
 +
 +Rule 2A spells out the calculation. Your exempt HRA is the **lowest** of these three amounts:
 +
 +  - The **actual HRA** you received from your employer during the year.
 +  - **Rent you actually paid, minus 10 percent of salary.**
 +  - **50 percent of salary** if you live in a metro city, or **40 percent of salary** if you live anywhere else.
 +
 +Whichever of the three is smallest is your exempt amount. The balance of the HRA you received is taxable.
 +
 +==== What counts as a metro city ====
 +
 +For this exemption, only four cities are treated as metros for the 50 percent rate: **Delhi, Mumbai, Kolkata and Chennai.** Every other city in India, including Bengaluru, Hyderabad, Pune and Ahmedabad, is treated as non-metro and uses the 40 percent rate for the return you file in 2026. Reported changes to this list apply to later years and do not affect your FY2025-26 return.
 +
 +==== What "salary" means here ====
 +
 +"Salary" for the HRA formula is narrower than your full pay. It means:
 +
 +  * **Basic salary**, plus
 +  * **Dearness Allowance (DA)**, but only to the extent it forms part of your pay under the terms of employment (that is, it counts towards retirement benefits), plus
 +  * **Commission** received as a fixed percentage of turnover.
 +
 +Other allowances, bonuses and perks are left out. The calculation is also done on a month-by-month basis where any of these figures change during the year, then totalled.
 +
 +===== A worked example =====
 +
 +Take Anita Sharma, who lives in a rented flat in Mumbai (a metro city) and files under the old regime. For the year her figures are:
 +
 +  * Basic salary: ₹40,000 a month, so ₹4,80,000 for the year. She gets no DA and no commission.
 +  * HRA received: ₹20,000 a month, so ₹2,40,000 for the year.
 +  * Rent paid: ₹18,000 a month, so ₹2,16,000 for the year.
 +
 +Now the three legs of Rule 2A:
 +
 +  - Actual HRA received: **₹2,40,000.**
 +  - Rent paid minus 10 percent of salary: ₹2,16,000 minus ₹48,000 = **₹1,68,000.**
 +  - 50 percent of salary (Mumbai is a metro): 50 percent of ₹4,80,000 = **₹2,40,000.**
 +
 +The lowest of the three is **₹1,68,000**, so that much of Anita's HRA is exempt. The remaining ₹2,40,000 minus ₹1,68,000 = **₹72,000** is added to her taxable salary.
 +
 +If Anita lived in, say, Nagpur (non-metro), the third leg would be 40 percent of ₹4,80,000 = ₹1,92,000, but the rent-minus-10-percent leg of ₹1,68,000 would still be the smallest, so her exemption would be the same ₹1,68,000.
 +
 +===== Documents you should keep =====
 +
 +  * **Rent receipts** for the year, with the rent amount, period and your landlord's signature.
 +  * A copy of the **rent agreement**, if you have one.
 +  * **Proof of payment**, such as bank transfer records, which carry more weight than cash.
 +  * Your **landlord's PAN** if your total rent for the year is more than ₹1,00,000. This threshold works out to rent above about ₹8,333 a month.
 +
 +If your landlord does not have a PAN, the accepted practice (per CBDT Circular No. 8/2013 dated 10 October 2013) is to get a signed declaration from the landlord stating that they do not hold a PAN, along with their name and address.
 +
 +===== Common mistakes to avoid =====
 +
 +  * **Claiming HRA under the new regime.** It simply is not allowed there. Choose the old regime first.
 +  * **Using 50 percent for a non-metro city.** Only Delhi, Mumbai, Kolkata and Chennai get 50 percent for this exemption.
 +  * **Counting full salary instead of basic plus eligible DA plus commission.** That inflates the figure and the claim.
 +  * **Skipping the landlord PAN** when annual rent crosses ₹1,00,000. Without it the exemption can be denied.
 +  * **Paying rent to a spouse and treating it casually.** Rent paid to family is scrutinised; keep a genuine agreement, real bank payments and ensure the recipient reports the income.
 +
 +===== Claiming it in your ITR if the employer missed it =====
 +
 +Many employees forget to submit rent proof to their employer in time, so the HRA exemption never shows up in Form 16. You can still claim it yourself when you file your return, as long as you genuinely received an HRA component in your pay and actually paid the rent. Recompute the exempt amount using Rule 2A, reduce your taxable salary accordingly in the ITR, and keep your rent receipts and proofs ready in case the Income-tax Department asks.
 +
 +===== RTI angle: getting your HRA and salary records =====
 +
 +If you are a government employee and your office is slow to share your pay structure, HRA sanction or city classification, you can ask for it under the Right to Information Act. A short [[https://righttoinformation.wiki/act|RTI Act, 2005]] application to the Public Information Officer of your department (or, for defence pay, the Controller General of Defence Accounts) can get you certified salary and HRA records that help you compute and prove your claim.
 +
 +A sample RTI angle: ask for "a certified copy of my pay fixation and HRA entitlement for the financial year 2025-26, including the basic pay, dearness allowance and the city classification applied." You can frame this cleanly with the https://righttoinformation.wiki/tools/ai-rti-draft-app.html (AI RTI Drafter). If the PIO gives an incomplete or evasive reply, run it through the https://righttoinformation.wiki/tools/pio-reply-checker-app.html (PIO Reply Checker) and, where needed, escalate using the https://righttoinformation.wiki/tools/first-appeal-app.html (First Appeal Builder).
 +
 +===== Frequently asked questions =====
 +
 +==== Can I claim HRA exemption under the new tax regime? ====
 +
 +No. The HRA exemption under Section 10(13A) is available only if you opt for the old tax regime. The new regime, which is the default since FY2023-24, removes this exemption. You have to choose the old regime to claim it.
 +
 +==== Which cities count as metro for the 50 percent HRA rule? ====
 +
 +For this exemption, only Delhi, Mumbai, Kolkata and Chennai are metros and get the 50 percent rate. All other cities, including Bengaluru, Hyderabad, Pune and Ahmedabad, are treated as non-metro at 40 percent for the return you file in 2026.
 +
 +==== What does "salary" mean in the HRA formula? ====
 +
 +It means your basic salary, plus dearness allowance to the extent it forms part of your pay (counting towards retirement benefits), plus any commission received as a fixed percentage of turnover. Other allowances and bonuses are excluded.
 +
 +==== Is my landlord's PAN compulsory to claim HRA? ====
 +
 +Yes, if your total rent for the year is more than ₹1,00,000. You must report the landlord's PAN. If the landlord has no PAN, get a signed declaration to that effect with their name and address, as allowed by CBDT Circular No. 8/2013.
 +
 +==== Can I claim HRA if I pay rent to my parents? ====
 +
 +Yes, if the arrangement is genuine. There must be a real landlord-tenant relationship, you should actually pay the rent (ideally by bank transfer), and the parent who receives it must report that rent as income in their own return.
 +
 +==== What if my employer did not give me the HRA exemption in Form 16? ====
 +
 +You can still claim it yourself in your income-tax return, provided you actually received an HRA component in your salary and paid rent. Recompute the exempt amount under Rule 2A, reduce your taxable salary in the ITR, and keep your rent proofs.
 +
 +==== I get no HRA at all. Can I still get a rent benefit? ====
 +
 +Not under Section 10(13A), which needs an HRA component. If you receive no HRA, you may be able to claim a rent deduction under Section 80GG instead, subject to its own conditions and limits. See https://righttoinformation.wiki/section-80gg-rent-deduction-no-hra-india.
 +
 +==== Do I need rent receipts even for low rent? ====
 +
 +It is wise to keep rent receipts and proof of payment regardless of amount, because the Income-tax Department can ask you to substantiate the claim. Once your annual rent crosses ₹1,00,000, the landlord's PAN becomes mandatory as well.
 +
 +===== Next steps =====
 +
 +Work out your own least-of-three figure using the example above, confirm you are on the old regime, and gather your rent receipts and landlord PAN before you file. If you need salary or HRA records from a government employer to back up your claim, an RTI application is the fastest lever. For a deeper, step-by-step grounding in how to use the RTI Act effectively, read [[https://righttoinformation.wiki/book|The RTI Playbook]], and draft your request with the https://righttoinformation.wiki/tools/awaaz-rti.html (AwaazRTI voice) tool.
 +
 +===== Sources =====
 +
 +  * Income-tax Act, 1961, Section 10(13A); Income-tax Rules, 1962, Rule 2A (incometaxindia.gov.in).
 +  * CBDT Circular No. 8/2013 dated 10 October 2013 on landlord PAN reporting for rent above ₹1,00,000.
 +
 +{{tag>hra exemption calculate claim section}}
  
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