Question 1

What is House Rent Allowance (HRA) tax exemption?

Accepted Answer

HRA is a component of salary given by employers to employees to meet house rent expenses. Individuals can claim deduction on this allowance to reduce their taxable salary under Section 10(13A) of the Income Tax Act, provided they actually live in a rented accommodation.

Question 2

What is the mathematical formula for HRA exemption?

Accepted Answer

HRA tax exemption is the minimum of three clauses: 1) The actual HRA received from your employer. 2) The actual rent paid minus 10% of your salary (Basic + DA). 3) 50% of your salary for Metro cities (Mumbai, Delhi, Kolkata, Chennai) or 40% of your salary for Non-Metro cities.

Question 3

Do I need rent receipts or PAN of landlord to claim HRA?

Accepted Answer

Yes. To claim HRA exemption, you must submit rent receipts or rent agreement to your employer. Furthermore, if your total rent paid exceeds ₹1,00,000 in a financial year, submitting the PAN of your landlord is mandatory to claim HRA tax exemption.

Question 4

Can I claim both HRA exemption and Home Loan interest deduction?

Accepted Answer

Yes! If you own a house (for which you pay Home Loan interest under Section 24B and principal under Section 80C) but reside in a different city or rented accommodation due to work, employment location, or other genuine reasons, you can claim both HRA tax exemption and home loan deductions simultaneously.

HRA Calculator — House Rent Allowance Tax Exemption Calculator

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