Tax exemption for salaried individuals living in rented accommodation. HRA can be fully or partially exempt from income tax. If you receive HRA but don't live in a rented house, it is fully taxable.
HRA Calculation (Lowest of Three)
- Total HRA received from employer
- Rent paid minus 10% of (Basic Salary + DA)
- 40% of (Basic + DA) for non-metro cities
- 50% of (Basic + DA) for metro cities (Mumbai, Delhi, Chennai, Kolkata)
Documents Required
- Rent receipts or rent agreement
- Landlord's PAN if annual rent exceeds ₹1,00,000
- Declaration to employer about rented accommodation
This guide reflects FY 2025-26 (AY 2026-27) and is for general information. Tax rules and limits change, and how they apply depends on your circumstances. It is not professional tax advice; consult a qualified Chartered Accountant before acting.
