Tax Planning
How HRA exemption is calculated under Section 10(13A)
HRA exemption is the minimum of: 1) actual HRA received, 2) 50% of basic salary in metros (40% in non-metros), and 3) rent paid minus 10% of basic salary.
The statutory three-condition test
Section 10(13A) Rule 2A defines exempt HRA as the lowest of: (a) actual HRA received from your employer, (b) 50% of basic salary + DA for residents of Delhi, Mumbai, Kolkata, or Chennai (40% for other locations), or (c) rent paid minus 10% of basic salary + DA.
Required documentation and landlord PAN
If total annual rent paid exceeds ₹1,00,000 (approx. ₹8,333/month), the landlord's Permanent Account Number (PAN) must be declared to the employer to claim exemption. Proper rent receipts and a registered or notarised rent agreement should be maintained.
Tax regime applicability
Section 10(13A) HRA exemption is available exclusively under the Old Tax Regime. The default New Tax Regime under Section 115BAC does not allow deductions or exemptions for HRA.
How to check your HRA exemption
Take your annual Basic Salary + DA, annual HRA from salary slips, and actual rent paid. Compute: 1) Actual HRA, 2) 50% of Basic (Metro) or 40% (Non-Metro), and 3) Rent paid minus 10% of Basic. The smallest of these three figures is your exact annual tax-free HRA.
This guide is for general education. Rules, lender terms, bank terms and individual circumstances can change the result.
Use the relevant calculatorFrequently asked questions
Is HRA available in the New Tax Regime?
No. Section 10(13A) HRA exemption is exclusively available under the Old Tax Regime.
Do I need landlord's PAN to claim HRA?
Yes, if annual rent exceeds ₹1,00,000, quoting the landlord's PAN is mandatory under Income Tax rules.