Calculate Your HRA Tax Exemption under Section 10(13A)
Salaried employees residing in rented accommodation can claim tax exemption on House Rent Allowance (HRA) under Section 10(13A) of the Income-tax Act, 1961, read with Rule 2A of the Income-tax Rules, 1962. This calculator automatically computes the exact exempt amount and the taxable HRA portion.
Statutory Rule 2A Formula for HRA Exemption
The exempt HRA is calculated as the lowest of the following three statutory amounts:
- Actual HRA received from the employer during the relevant period.
- Rent paid in excess of 10% of salary (Rent Paid minus 10% of Basic + DA).
- 50% of salary (if residing in Delhi, Mumbai, Kolkata, or Chennai) or 40% of salary (if residing in any other Indian city or town).
Important Rules & Rent Receipt Requirements
- Landlord PAN Mandatory: If total annual rent paid exceeds ₹1,00,000 (i.e. > ₹8,333/month), declaring the Landlord’s PAN is statutory under CBDT Circulars.
- Old Regime Only: HRA exemption is exclusively available under the Old Tax Regime. Under Section 115BAC (New Tax Regime), HRA exemption cannot be claimed.
- Salary Definition for HRA: For Rule 2A, “Salary” comprises Basic Pay + Dearness Allowance (DA forming part of retirement benefits) + Commission based on fixed turnover percentage.
Frequently Asked Questions
Can I pay rent to parents and claim HRA?
Yes. You can pay rent to your parents provided they own the property, you make genuine bank transfers, rent receipts are issued, and your parents declare this rental income in their respective Income Tax Returns.
Can I claim both HRA and Home Loan Tax benefits?
Yes, if you own a home in one city (or far from your work location) and live in a rented home near your place of employment, you can claim both HRA and home loan deductions under Section 24(b) and 80C.