Question 1

What is the formula for HRA tax exemption under Section 10(13A)?

Accepted Answer

HRA exemption is the least of three amounts: (1) the actual HRA your employer pays, (2) rent paid minus 10% of salary, and (3) 50% of salary in the eight notified cities, or 40% anywhere else. "Salary" here means basic pay plus dearness allowance that counts for retirement benefits, plus any commission fixed as a percentage of turnover — not your whole CTC. From tax year 2026-27 the 50% cities are Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (Income-tax Rules, 2026). Up to FY 2025-26 only the first four qualified, under Rule 2A.

Question 2

Is HRA tax exemption available under the New Tax Regime?

Accepted Answer

No. Section 10(13A) (now Schedule III, Sl. No. 11 of the Income-tax Act, 2025) exemption exists only under the old regime, and the new regime is the default, so most salaried people cannot claim it at all. If you pay significant rent in a metro this single exemption is often what makes the old regime worth choosing — run both on the calculator before deciding. If you do not receive HRA as part of your salary, Section 80GG allows a smaller deduction instead, also old-regime only.

Question 3

Can I pay rent to my parents and claim HRA exemption?

Accepted Answer

Yes, you can claim HRA by paying rent to your parents provided your parents own the property, you transfer the rent via banking channels, and your parents declare the rental income in their ITR.

Question 4

Do I need my landlord's PAN to claim HRA?

Accepted Answer

Yes, if the rent you pay in the financial year exceeds ₹1,00,000, which is just ₹8,334 a month. CBDT Circular 8/2013 requires you to report the landlord's name, address and PAN to your employer in Form 124 (earlier Form 12BB). If the landlord refuses to share a PAN, you need a signed declaration from them with their name and address, plus a Form 60. Without this, your employer will not allow the exemption in your TDS, though you can still claim it while filing your return if the rent is genuine.

Question 5

Can I claim HRA and home loan interest at the same time?

Accepted Answer

Yes, on the old regime, because they are different sections. HRA under Section 10(13A) (now Schedule III, Sl. No. 11 of the Income-tax Act, 2025) covers the house you actually live in on rent; Section 24(b) covers interest on a house you own. This works naturally when your own flat is in another city, or is let out, or is genuinely not occupiable — say it is under construction. Claiming both for two properties in the same city invites questions, so keep rent receipts, the lease and the loan statement. The new regime allows neither.

Question 6

What if my salary has no HRA component at all?

Accepted Answer

On the old regime you can fall back on Section 80GG, which is meant for people who pay rent but get no HRA. The deduction is the least of ₹5,000 a month, 25% of total income, or rent paid minus 10% of total income — so at most ₹60,000 a year. You must file Form 10BA, and neither you, your spouse nor your minor child may own a house in the city where you work or live. Section 80GG, like HRA itself, is not available under the new regime.

Question 7

How is HRA calculated if I changed city or rent mid-year?

Accepted Answer

The exemption is worked out period by period, not once for the whole year, and the results are added. If you spent five months in Jaipur at 40% of salary and seven in Mumbai at 50%, each stretch gets its own least-of-three test using the salary, rent and HRA of only those months. The same applies when your rent or basic pay changes mid-year. This is why a single annual figure often overstates the exemption, and why employers ask for month-wise rent receipts.

Bound	Value	Binding?
1. Actual HRA received	₹2.40 L
2. 50% of basic + DA	₹3.00 L
3. Rent paid − 10% of basic + DA	₹1.80 L	✓

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