ITR Filing
Salary, business, capital gains, NRI returns — all ITR types for AY 2027-28.
Calculate House Rent Allowance exemption with month-wise precision. Built per Section 10(13A) Income Tax Act 1961 & Section 14 Income Tax Act 2025. Download your computation as a PDF.
Section 10(13A) of the Income Tax Act 1961 read with Rule 2A — and Section 14 of the Income Tax Act 2025 — prescribe this three-limb formula. Whichever of these three is the lowest becomes your exempt HRA. The balance HRA is taxable as salary.
The total House Rent Allowance you actually received from your employer during the financial year, as reflected in Form 130 (formerly Form 16).
Rent actually paid minus 10% of salary. "Salary" here means Basic Pay + Dearness Allowance forming part of retirement benefits + commission as a fixed percentage of turnover.
50% of salary if you live in a metro city (Delhi, Mumbai, Kolkata, Chennai). 40% of salary if you live anywhere else in India.
Balance HRA received is added to your taxable salary income.
HRA exemption is available only under the Old Tax Regime. If you opt for the New Tax Regime under Section 115BAC (Act 1961) / Section 202 (Act 2025), HRA exemption is forfeited along with most other deductions. Choose your regime carefully each year.
Rule of thumb: If your HRA exemption + 80C + 80D + home loan interest exceeds approximately ₹4–5 lakh, the Old Regime typically yields lower tax. Get a personalised comparison →
HRA exemption is governed by parallel provisions in both Acts — the older Act 1961 (still applicable for FY 2025-26 assessments) and the new Act 2025 (effective from FY 2026-27).
Provides exemption for "any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent."
Rule 2A of the Income Tax Rules 1962 prescribes the three-limb computation: actual HRA, rent minus 10% salary, and 50%/40% of salary based on city.
The new Act preserves the HRA exemption with substantially similar conditions. The detailed computation moves from Rules to Schedule III of the Act 2025.
Definitions of "salary" and "metro city" remain unchanged. The four metro cities — Delhi, Mumbai, Kolkata, Chennai — continue to qualify for the 50% limit.
Maintain these records throughout the year. Your employer will collect them in Form 12BB; the Assessing Officer may demand them during scrutiny under Section 143(2) / Section 268 of Act 2025.
Monthly or quarterly rent receipts signed by the landlord with revenue stamp where rent exceeds ₹5,000 per month.
Registered or notarized rent agreement (lease deed). Strongly recommended if annual rent exceeds ₹1 lakh.
Mandatory if annual rent exceeds ₹1,00,000. If landlord has no PAN, obtain Form 60 declaration.
Statement of particulars submitted to employer at the start of the financial year for TDS purposes.
Bank transfer proof showing rent paid to landlord — particularly important if paying rent to family members.
Annual TDS certificate from employer showing HRA paid and exemption granted, issued under Section 393 of Act 2025.
From HRA documentation review and ITR filing to representation in scrutiny and faceless assessment proceedings — get end-to-end professional support for your salary taxation matters.
Professional charges discussed during consultation. Connect for case-specific advice.
Deep dives on the Income Tax Act 2025, GST, audits, and recent judicial pronouncements — written by CA Alok Kumar and published on our blog at /my-writing/
A comprehensive analysis of how the new Income Tax Act 2025 reorganises 558 sections of the old Act 1961, with key changes salaried taxpayers must know.
How the new Income Tax Act 2025 preserves HRA exemption under Section 14, modifies LTA, and continues the ₹75,000 standard deduction for salaried employees.
A practical guide to evaluating Old vs New regime with break-even calculations, factoring in HRA, 80C, 80D, home loan interest, and Section 87A rebate.