Rule for HRA exemption
The exempt part of HRA is the least of: (1) actual HRA received, (2) rent paid minus 10% of salary, and (3) 50% of salary in a metro city or 40% elsewhere. "Salary" means basic plus dearness allowance (if it forms part of retirement benefits) and commission at a fixed percentage of turnover. HRA exemption is not available in the new regime. Full worked examples: HRA exemption calculation with examples.
Frequently asked questions
Which cities are metro for HRA from 2026?
Under the Income-tax Rules, 2026, Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad qualify for 50%. For FY 2025-26 and earlier, only Delhi, Mumbai, Kolkata and Chennai.
Can I claim HRA if I pay rent to my parents?
Yes, if the arrangement is genuine – a rent agreement, payment through bank, and the parent shows the rent as income in their return.
Do I need my landlord's PAN?
Yes, where annual rent exceeds ₹1 lakh, the landlord's PAN must be given to the employer.
Tool last reviewed 10 November 2026. Results are estimates for general guidance and are not professional advice.
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