Calculate your House Rent Allowance tax exemption
Exemption = Minimum of 3 values
1. Actual HRA Received
2. Rent Paid minus 10% of (Basic + DA)
3. 50% of Basic (Metro) OR 40% of Basic (Non-Metro)
HRA exemption is the MINIMUM of these three amounts: 1) Actual HRA received from employer, 2) Rent paid minus 10% of (Basic + DA), 3) 50% of (Basic + DA) for metro cities or 40% for non-metro cities. The remaining HRA above this exemption is taxable.
Only Delhi, Mumbai, Chennai, and Kolkata are considered metro cities for HRA calculation (50% of Basic+DA). All other cities including Bangalore, Hyderabad, Pune are non-metro (40% of Basic+DA).
Yes, you can pay rent to your parents and claim HRA exemption. Your parents must show this as rental income in their tax return. Keep a rent agreement, rent receipts, and bank transfer proof. Parent's PAN is required if rent exceeds ₹1 Lakh/year.
Yes, if your house is in a different city from your workplace, you can claim both HRA exemption (for rented house at workplace) and home loan benefits under Section 80C (principal) and Section 24 (interest). The property should be in a different city.
You need: Rent receipts (with revenue stamp if rent >?5000), Rent agreement, Landlord's PAN (if annual rent >₹1 Lakh), and bank statements showing rent payments. Keep these for 6 years after filing ITR.