How is HRA exemption calculated?+
HRA exemption = Minimum of these 3 conditions: (1) Actual HRA received from employer, (2) 50% of Basic + DA (for metro cities: Delhi, Mumbai, Chennai, Kolkata) or 40% for non-metro cities, (3) Actual rent paid – 10% of Basic + DA. The minimum of these three is your tax-exempt HRA. The remaining HRA (above exemption) is fully taxable.
Which cities are considered metro for HRA?+
For HRA exemption purposes, only 4 cities are classified as metro: Delhi, Mumbai (including suburban areas), Chennai, and Kolkata. All other cities including Bengaluru, Hyderabad, Pune, Ahmedabad, and others are treated as non-metro. Metro employees get 50% of basic as HRA exemption; non-metro get 40%.
Is HRA available under the new tax regime?+
No, HRA exemption is NOT available under the New Tax Regime. The new regime offers lower tax rates but removes most deductions and exemptions. If you pay significant rent, the old tax regime with HRA exemption may be more beneficial — especially if your rent-paid HRA exemption is substantial (above ₹2–3 lakh/year).
What if I don't get HRA from employer but pay rent?+
If your employer doesn't provide HRA as part of your salary but you pay rent for accommodation, you can still claim rent deduction under Section 80GG (up to ₹60,000 per year) under the old tax regime, provided: You are self-employed or your employer doesn't provide HRA, you don't own any property in the city you live in, and your spouse/children don't own property there.
Do I need to submit rent receipts for HRA?+
For annual HRA claim above ₹1 lakh, you must provide the landlord's PAN card. Rent receipts are needed to claim HRA exemption. If paying rent above ₹50,000/month, TDS of 5% under Section 194IB must be deducted from the rent and deposited with the government. If your landlord is an NRI, TDS rate is 30%.