Find out how much of your House Rent Allowance is tax-exempt under Section 10(13A) of the Income Tax Act.
HRA exemption under Section 10(13A) is the minimum of the following three amounts:
The lowest of these three amounts is exempt from tax. The remaining HRA (total HRA received minus exempt amount) is added to your taxable income.
HRA exemption is the minimum of three amounts: (1) Actual HRA received from employer, (2) 50% of basic salary for metro cities or 40% for non-metro cities, (3) Rent paid minus 10% of basic salary. The lowest of these three is exempt from tax.
For HRA exemption, the four metro cities are Delhi, Mumbai, Kolkata, and Chennai. If you live in any of these cities, you get 50% of basic salary as the HRA limit. All other cities are considered non-metro with a 40% limit.
No, HRA exemption requires that you actually pay rent for the house you live in. If you live in your own house or don't pay rent, you cannot claim HRA exemption.
No, HRA exemption under Section 10(13A) is not available under the new tax regime. If you want to claim HRA exemption, you must opt for the old tax regime.
If your annual rent exceeds Rs 1 lakh, you must provide the landlord's PAN number to claim HRA exemption. Rent receipts are recommended for all rent amounts as proof.