Section 10(13A) · House Rent Allowance (HRA) exemption
Pay rent, get a slice of your HRA tax-free.
- Available under
- Old regime only
- Metro rate
- 50% of salary
- Non-metro rate
- 40% of salary
- Landlord PAN
- Required if rent > ₹1,00,000/yr
In plain English
If you're salaried, live in rented accommodation and your employer pays you HRA, a part of that HRA is tax-free. The exempt amount is whichever is the LEAST of three numbers — actual HRA, rent paid above 10% of salary, and 50% (metro) or 40% (non-metro) of your salary.
| Meaning | Number |
|---|---|
| Metro rate | 50% of salary |
| Non-metro rate | 40% of salary |
| Landlord PAN | Required if rent > ₹1,00,000/yr |
Least of these three is exempt
- Actual HRA received — From the employer during the year
- Rent paid − 10% of salary — Salary = Basic + DA (forming part) + commission on turnover
- 50% or 40% of salary — 50% for metro (Delhi, Mumbai, Kolkata, Chennai); 40% elsewhere
- Rent receipts — Keep them, plus landlord's PAN if rent > ₹1L per year
What this section covers
Section 10(13A) exempts House Rent Allowance received by a salaried employee from tax, to the extent computed under Rule 2A. The exemption is the least of: (a) actual HRA received, (b) rent paid in excess of 10% of salary, and (c) 50% of salary in metro cities (Mumbai, Delhi, Kolkata, Chennai) or 40% in other cities. 'Salary' here means basic salary plus dearness allowance forming part of retirement benefits, plus commission as a fixed percentage of turnover. The exemption is available only if the employee actually pays rent and does not own the accommodation. Landlord's PAN must be reported where annual rent exceeds ₹1,00,000. HRA exemption is NOT available under the default new regime (Section 115BAC).
The legal text
“In the case of an assessee who is in receipt of any allowance specifically granted to him by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by him, [such amount, not exceeding the limit specified in this behalf,] as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 10(13A) | Schedule II |
| Topic | House Rent Allowance (HRA) exemption | |
| Verdict | Restated — concept retained | |
| Notes | Under the Income-tax Act, 2025, HRA-style exemptions are now consolidated in the Schedules dealing with salary perquisites and exempt allowances. The mechanism (least-of-three) and the 50%/40% city classification are retained. | |
Common confusion
HRA exemption is NOT available under the new regime. Also, if your employer doesn't pay HRA but you still pay rent, the relief is under Section 80GG (not 10(13A)).
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.