House Rent Allowance is one of the largest tax deductions available to salaried Indians under the old regime - for someone in the 30% slab paying ₹40,000 monthly rent, the exemption can save ₹70,000–₹1,40,000 in annual tax depending on basic salary. The exemption is the lowest of three formulas (actual HRA, 50%/40% of basic, rent minus 10% of basic) and the binding condition flips between them depending on your salary structure and city.
The guides below cover the three areas where most claims go wrong: the calculation itself (and which of the four metro cities under the Income Tax Act qualifies for the higher 50% limit), the strict documentation rules when paying rent to parents (PAN, bank transfers, parent ITR), and the alternative Section 80GG deduction for employees without HRA in their salary structure. The FAQ at the bottom answers the most common questions.
All HRA Guides
HRA Exemption Complete Guide India 2026 | Calculation
Least of actual HRA, 50%/40% of basic, or rent minus 10% of basic. Metro vs non-metro examples. Section 10(13A) and Rule 2A explained.
Read Guide →Paying Rent to Parents for HRA Exemption India 2026 | Rules
Need rent agreement, bank transfers, parent ITR and PAN above ₹1 lakh rent. Cannot claim if paying to spouse.
Read Guide →Section 80GG Deduction India 2026 | Rent Claim Without HRA
For employees without HRA in salary. Max ₹5,000/month. Three conditions apply. Form 10BA required. Worked ₹8 lakh income example.
Read Guide →Calculate Your HRA
Use our free HRA calculator to plan your investments with accurate projections.
Open HRA Calculator →Frequently Asked Questions
How is HRA exemption calculated?
HRA exemption is the minimum of: (1) actual HRA received from employer, (2) 50% of basic+DA for metro cities or 40% for non-metros, (3) actual rent paid minus 10% of basic+DA. From FY 2026-27, 8 cities qualify as metros under Income Tax Rules 2026: Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, and Ahmedabad. Only the exempt amount is deducted from taxable salary under Section 10(13A).
Can I claim HRA if I live with my parents?
Yes - you can pay rent to your parents and claim HRA, provided: the house is owned by them (not you), you actually transfer rent each month (bank transfer preferred, keep proof), and they declare the rental income in their ITR. Avoid token rents; rent should reflect market rates for the area.
What if my employer does not pay HRA?
If HRA is not part of your salary, you can claim rent paid under Section 80GG instead. The deduction is the minimum of: ₹5,000/month (₹60,000/year), 25% of total income, or actual rent paid minus 10% of total income. Self-employed individuals and salaried without HRA can both use 80GG.
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