House Rent Allowance (HRA) - What Is House Rent Allowance, HRA Exemption and Tax Deduction

3/5/23, 11:05 PM House Rent Allowance (HRA) - What is House Rent Allowance, HRA Exemption And Tax Deduction
My Research Folder
Products Explore Income Tax Explore More File ITR Login/Signup
BROWSE BY TOPICS HOME INCOME-TAX

CONTENTS
HOUSE RENT ALLOWANCE (HRA) - WHAT IS HOUSE RENT ALLOWANCE, HRA EXEMPTION AND TAX DEDUCTION
Income Tax e-Filing
Last Date To File ITR For House Rent Allowance (HRA) - What is HRA (House Rent Allo…
How is Tax Exemption From H…
What is House Rent Allowance,

2022-23
HRA Calculator
Income Tax Slabs FY 2023-24
Can I Claim HRA and Deducti…
House Property HRA Exemption And Tax When Do You Need a Landlor…
Business, Professional &

Freelance Deduction What If I Don’t Receive an HR…
Illustration
Efiling Income Tax Return How to Claim HRA When Livin…

Updated on: Feb 5th, 2023 - 5:19:26 PM 12 min read
How to Claim Deduction Und…
Income Tax Refunds
Frequently Asked Questions
Paying Tax Due Salaried individuals, who live in rented houses, can claim the House Rent
Salary Income Allowance (HRA) to lower their taxes – partially or wholly.
Capital Gains Income
This allowance is for expenses related to rented accommodation. If you
Other income sources
don’t live in a rented accommodation, this allowance is fully taxable.
Advance Tax
NRI Please note that the tax exemption of house rent allowance is not
HUF
available in case you choose the new tax regime from FY 2020-21 (AY 2021-
22)
Income Tax Notices
POPULAR ARTICLES
Budget 2023 Highlights: PDF

Download, Key Takeaways,
Important Points
Budget 2023 Expectations

For Income Tax: 80C & 80D
Limit Increase, Tax Slab
Changes For Salaried
Employees

Important Points
RELATED ARTICLES

Important Points

Important Points
What is HRA (House Rent Allowance)?

https://cleartax.in/s/hra-house-rent-allowance 1/10
Budget 2023: Full List of

My Research Folder HRA means house rent allowance in income tax, which is paid by an
Cheaper and Costlier Items Explore Income Tax File ITR
employer to the employee. It means the salary component received
How to file ITR Online – Step
by Step Guide to Efile towards the rent payment and is allowed as a deduction from taxable
Income Tax Return, FY 2021-
salary under Section 10(13A).
22 (AY 2022-23)
Which ITR Should I File?
How is Tax Exemption From HRA

Types of ITR Forms for FY
2021-22, AY 2022-23 – All ITR
Forms
UAN Login, Portal

Calculated?
Registration, Universal
Account Number Activation
& Status Check The deduction available is the least of the following amounts:
Income Tax Raid, Search and
Seizure – What, When, How Actual HRA received
ITR U – What is ITR-U Form 50% of [basic salary + DA] for those living in metro cities
and How to File ITR-U
40% of [basic salary + DA] for those living in non-metros
Actual rent paid should be less than 10% of basic salary + DA
HRA Calculator
Use Now
Can I Claim HRA and Deduction on

Home Loan Interest?
Yes, you may claim the HRA as it has no bearing on your home loan interest
deduction. Both can be claimed.
Try out our free HRA calculator to determine your HRA exemption. This
calculator shows you on what part of your HRA you have to pay taxes – i.e.
how much of your HRA is taxable and exempt from tax.
When Do You Need a Landlord’s

PAN?
If you have taken a house on rent and are making a payment of over Rs 1
lakh annually – remember to provide the landlord’s PAN. Else, you may lose
out on the HRA exemption.
Landlords without a PAN must sign a self declaration stating he does not
have a PAN, as per circular No. 8/2013 dated 10 October 2013.
Tenants paying rent to NRI landlords must remember to deduct TDS of 30%
before making the payment towards rent.
What If I Don’t Receive an HRA?

My Research Folder If you pay rent for living in a residential accommodation but do not receive
Explore Income Tax File ITR
an HRA from your employer, you can still claim the deduction under Section
80GG. Conditions that must be fulfilled to claim this deduction:
You are self-employed or salaried
You have not received HRA at any time during the year for which you
are claiming 80GG
You or your spouse or your minor child or HUF of which you are a
member – do not own any residential accommodation at the place
where you currently reside, perform duties of office, or employment or
carry on business or profession.
If you own any residential property other than the place mentioned above,
you should not claim the benefit of that property as self-occupied. The
other property would be deemed to be let out to claim the 80GG
deduction.
Illustration
Mr Anwar, employed in New Delhi, has taken up an accommodation on rent
for which he pays Rs 15,000 per month during the Financial Year (FY) 2021-
22. He receives a basic salary of Rs 25,000 monthly and DA of Rs 2,000,
which forms a part of the salary. He also gets an HRA of Rs 1 lakh from his
employer during the year.
Let us understand the HRA component that would be exempt from income
tax during FY 2021-22. As per the given data, calculate the following:
HRA received – Rs 1 lakh
50% of basic salary and DA – Rs 1,62,000 (50%*(Rs 25,000+Rs 2,000)*12

months)
Rent paid minus 10% of salary- Rs 1,47,600
Therefore, the entire HRA received from the employer is exempt from income
tax in the above example.
How to Claim HRA When Living With

Parents?
Let’s understand this with an example.
Samiksha works in an MNC in Bangalore. Though her company provides her

with HRA, she lives with her parents in their house and not in rented
accommodation. How can she make use of this allowance?
Samiksha can pay rent to her parents and claim the allowance provided.
She has to enter into a rental agreement with her parents and transfer
My Research Folder money to them every month. This way, Samiksha can make a nice gesture to
her parents while saving on taxes. Also, Samiksha’s parents need to report
the rent she paid as income in their income tax returns. If their other income
is below the basic exemption limit or taxable at a lower tax slab, they can
save tax on the family income.
How to Claim Deduction Under

Section 80GG?
The least of the following will be exempted from tax:
Rs 5,000 per month;
25% of adjusted total income*;
Actual rent should be less than 10% of adjusted total income*
*Adjusted total income is calculated as below:
Total income minus (i) long-term capital gain minus (ii) short-term capital
gain under Section 111A minus (iii) income under Section 115A or 115D minus
(iv) deductions 80C to 80U (except deduction under Section 80GG).
Frequently Asked Questions

When can I claim tax exemption on house rent
allowance?
You can claim tax exemption on HRA if you pay rent for your residential
accommodation.
How can I claim an HRA exemption?
You can claim HRA exemption by submitting proof of rent receipts to your
employer. Alternatively, you can claim the HRA exemption yourself while
filing your income tax return.
I am a self-employed individual. Can I claim an HRA

exemption?
A self-employed individual cannot claim an HRA exemption. Only a salaried

individual with an HRA component in their salary package can claim an
HRA exemption.
What is the tax liability in case my entire HRA is not tax-

exempt?
My Research Folder The employer deducts TDS at the applicable tax slab rates on balance
HRA, which is not tax-exempt.
Who can claim HRA exemption?
Salaried employees who receive house rent allowance as a part of salary

and pay rent, can claim HRA exemption to reduce their taxable salary
wholly or partially.
Which section of the income tax does HRA come under?
House rent allowance received by an employee is partially or wholly exempt

as per the conditions laid out in Section 10(13A).
What are HRA and DA?
Dearness allowance is a component of salary towards adjustment for living

costs paid generally to government employees, public sector employees,
and pensioners. Dearness allowance is calculated as a percentage of basic
salary to cover the impact of inflation.
HRA is a component of salary paid by big employers towards rent payment

by the employee. HRA exemption is allowed least of the below :
Actual HRA received by the employee
40% of salary for a non-metro city or 50% of salary if the rented

property is in metro cities like Mumbai, New Delhi, Kolkata, and
Chennai
Actual rent paid should be less than 10% of salary.
For the calculation above, the salary would include basic, dearness
allowance, and a fixed percentage of commission.
How to claim HRA in the Income Tax Return (ITR)?
The taxable portion of the HRA component should be included as a part of

‘Salary as per Section 17(1)’. An exempt portion of the HRA component is to
be added under the heading ‘allowances to the extent exempt u/s 10’
(ensure that it is included in salary income u/s 17 (1), 17(2), 17 (3)). Please note
that if you file ITR online through Clear, the software auto-populates the
Form 16 component. In such a case, verify the amount auto-populated with
information in Form 16.
How to claim HRA if not mentioned in Form 16?
My Research Folder If HRA is not mentioned in Form 16, that means your employer has not
provided a separate component of HRA. HRA u/s 10(13A) can be claimed
when the employer gives a separate component towards HRA. In the
absence of it, you can claim for rent paid under Section 80GG.
How to save HRA?
HRA can be at most claimed as according to the lowest of these three

amounts
Actual house rent allowance received
40% (non-metro city) or 50% (metro city ) of the salary
Actual rent paid less than 10% of the salary.
Please note that you can claim HRA if you reside at your parents’ house,
provided that you transfer the rent to your parents. In this case, your
parents will have to report this rental income in their return of income for
taxability purposes.
If your parents have income less than the basic exemption, they are not
liable to pay taxes.
Further, the benefit of HRA can also be claimed if you own a house and are
claiming a deduction for principal payment u/s 80C and interest deduction
u/s 24. The reason for residing in a rented house should be genuine and
valid. The IT department can closely monitor this arrangement.
What is an HRA certificate?
An HRA certificate is a certificate issued by the government employee for

claiming a house rent allowance for not being able to avail of a government
accommodation according to the prescribed procedure.
How to submit HRA proof for ITR?
Documents like rent receipts and rental agreements must be submitted to

the employer to claim a house rent allowance deduction. If the payment of
rent is more than Rs 1 lakh per annum, then the PAN of the landlord must be
submitted. Based on these proofs, employers will provide exemption for HRA
in Form 16.
How to declare HRA via ClearTax?
While filing returns through ClearTax, you can directly upload Form 16. The
details mentioned in Form 16 will auto-populate, including the HRA
exemption. However, suppose you don’t have Form 16. In that case, you can
My Research Folder add the exempt portion of HRA under the tab Income sources > point 2
exempt allowances under Section 10.
Use HRA exemption calculator of ClearTax.
How much HRA can be claimed without proof?
It is mandatory to submit rent receipts or a copy of the rental agreement as

proof for claiming a house rent allowance deduction.
What happens if proof for HRA exemption is not

submitted to the employer or HRA deduction is not
claimed in ITR?
If you missed submitting rent receipts or a copy of the rental agreement to

your employer at the time of proof submission of the declared rent, you can
claim the HRA deduction while filing ITR.
In case you miss claiming the HRA while filing your return, you can file a
revised return to correct the error before 31st December of the assessment
year or completion of assessment, whichever is earlier.
What is the maximum limit for HRA?
According to Section 10(13A), an employee can claim an HRA deduction

maximum up to the actual HRA component received from the employer.
Can I claim both 80GG and HRA?
Individuals paying rent but not receiving house rent allowance can claim a
deduction under Section 80GG. Also, the individual, spouse or children
should not own a house property in the place of employment, business or
location where the individual ordinarily resides for claiming this deduction.
You Might be Interested in

UIDAI
Income Tax Guide
Mutual Fund Investment
ITR Filing Due Dates
Budget 2023 Highlights
UAN Activation
Income Tax Filing Online
Income Tax Deductions List
My Research Folder
File your returns inExplore
just 3Income Tax
minutes File ITR
File Now
100% pre-fill. No manual data entry
PRODUCTS
Follow us on Individuals Income Tax Filing
Income Tax e Filing Income Tax App android

Tax Planning Income Tax
ClearInvestment Secion 80 Deductions
Have a query?
ClearServices Income tax for NRI
Support Mutual Funds & ITR e-filing App
Mutual funds
C O M PA N Y
ClearGST Enterprises
About us
Contact us GST ClearGST
Careers GST Login ClearE-Waybill
Media & Press GST software e-Invoicing Software
User reviews New GST returns ClearTDS
Engineering blog e-invoicing eWay Bill Registration
Clear Library Input tax credit
FinTech glossary
ClearTax Chronicles CAs SMEs
GST Product Guides
CA partner program ClearGST
Trust & Safety
ClearGST ClearOne
Cleartax(Saudi Arabia)
ClearTDS Billing Software
ClearTaxCloud Invoicing Software
ClearPro App Services for businesses
ClearOne App
ClearServices HSN Lookup
Tax filing for professionals HSN Code Finder

Tax filing for traders Cement HSN Code
Clear Launchpad Transport HSN Code
Trademark Registration Plastic HSN Code
Company Registration Cloth GST Rate
TDS returns Books GST Rate
MSME Registration
RESOURCES & GUIDES
GST Resources ITR Resources
GST Registration Income Tax Slab

GST Returns Form 26AS
GST Procedure What is Form 16
GST News & Announcement Salary Income
GSTR 9 Annual Returns How to File TDS Returns

My Research Folder
Explore&Income
GST Payments RefundsTax FileTax
New Income ITRPortal
Invoicing Under GST Incometax.gov.in
GSTR-2B Income from Selling Shares
GSTR-3B Income Tax Due Dates
Mutual Fund Resources Business Resources
How to Invest in Mutual Funds Memorandum of Understanding (MoU)

Mutual fund Types Mudra Yojana
ELSS Inflation & Deflation
SIP Mutual Funds Loan Agreement
Hedge Funds Succession Certificate
Debt Funds Solvency Certificate
NFO Debt Settlement Agreement
What is AMFI Rental Agreement
What is NAV Letters Of Credit
TO O LS
Income tax calculator PPF Calculator

EMI Calculator GST number search
Mutual fund calculator IFSC Code Search
HSN Code Finder Generate rent receipts
SIP calculator Home Loan EMI Calculator
GST calculator NPS Calculator
HRA calculator Find HSN code

RD Calculator Tax Saving Calculator
FD Calculator Get IT refund status
Gold Rates Today Salary Calculator
Currency Converter EPF Calculator
Compound Interest Calculator GST Number Search by Name
TRENDING MUTUAL FUNDS
ICICI Prudential Technology Fund Direct Plan Growth Tata Digital India Fund Direct Growth Axis Bluechip Fund Growth
ICICI Prudential Technology Fund Growth Aditya Birla Sun Life Tax Relief 96 Growth Aditya Birla Sun Life Digital India Fund Direct Plan Growth
Quant Tax Plan Growth Option Direct Plan SBI Technology Opportunities Fund Direct Growth Axis Long Term Equity Fund Growth
TO P A M CS
SBI Mutual Fund Nippon India mutual fund HDFC Mutual Fund UTI mutual fund Kotak Mahindra Mutual Fund
ICICI Prudential Mutual Fund Aditya Birla Mutual Fund Axis mutual fund
STO CK M A R K E TS
Stock Market Live Yes Bank Share Price SBI Share Price IRCTC Share Price ITC Share Price TCS Share Price
Tata Motors Share Price Infosys Share Price Idea Share Price HDFC Bank Share Price
BEST FUNDS
Best Mutual Funds Best Tax Savings Mutual Funds Best Index Funds Best Equity Mutual Funds
My Research Folder
Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax
experts & 10000+ businesses across India.
Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income
tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use
our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.
CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in
an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in
getting your business registered for Goods & Services Tax Law.
Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP.
Download Black by ClearTax App to file returns from your mobile phone.
CLEARTAX IS A PRODUCT BY DEFMACRO SOFTWARE PVT. LTD.

Company Policy Terms of use
ISO 27001 SSL Certified Site

Data Center 128-bit encryption

House Rent Allowance (HRA) - What Is House Rent Allowance, HRA Exemption and Tax Deduction

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

House Rent Allowance (HRA) - What Is House Rent Allowance, HRA Exemption and Tax Deduction

Uploaded by

Copyright:

Available Formats

3/5/23, 11:05 PM House Rent Allowance (HRA) - What is House Rent Allowance, HRA Exemption And Tax Deduction

BROWSE BY TOPICS HOME INCOME-TAX

How is Tax Exemption From H…

What is House Rent Allowance,

Business, Professional &

Efiling Income Tax Return How to Claim HRA When Livin…

Budget 2023 Highlights: PDF

Budget 2023 Expectations

Budget 2022 Highlights: PDF

Budget 2022 Highlights: PDF

Budget 2023 Highlights: PDF

What is HRA (House Rent Allowance)?

Budget 2023: Full List of

Which ITR Should I File?

How is Tax Exemption From HRA

UAN Login, Portal

40% of [basic salary + DA] for those living in non-metros

Actual rent paid should be less than 10% of basic salary + DA

Can I Claim HRA and Deduction on

When Do You Need a Landlord’s

What If I Don’t Receive an HRA?

You are self-employed or salaried

HRA received – Rs 1 lakh

50% of basic salary and DA – Rs 1,62,000 (50%*(Rs 25,000+Rs 2,000)*12

Rent paid minus 10% of salary- Rs 1,47,600

How to Claim HRA When Living With

Samiksha works in an MNC in Bangalore. Though her company provides her

How to Claim Deduction Under

Rs 5,000 per month;

25% of adjusted total income*;

Actual rent should be less than 10% of adjusted total income*

*Adjusted total income is calculated as below:

Frequently Asked Questions

How can I claim an HRA exemption?

I am a self-employed individual. Can I claim an HRA

A self-employed individual cannot claim an HRA exemption. Only a salaried

What is the tax liability in case my entire HRA is not tax-

Who can claim HRA exemption?

Salaried employees who receive house rent allowance as a part of salary

Which section of the income tax does HRA come under?

House rent allowance received by an employee is partially or wholly exempt

What are HRA and DA?

Dearness allowance is a component of salary towards adjustment for living

HRA is a component of salary paid by big employers towards rent payment

Actual HRA received by the employee

40% of salary for a non-metro city or 50% of salary if the rented

Actual rent paid should be less than 10% of salary.

How to claim HRA in the Income Tax Return (ITR)?

The taxable portion of the HRA component should be included as a part of

How to claim HRA if not mentioned in Form 16?

How to save HRA?

HRA can be at most claimed as according to the lowest of these three

Actual house rent allowance received

40% (non-metro city) or 50% (metro city ) of the salary

Actual rent paid less than 10% of the salary.

What is an HRA certificate?

An HRA certificate is a certificate issued by the government employee for

How to submit HRA proof for ITR?

Documents like rent receipts and rental agreements must be submitted to

How to declare HRA via ClearTax?

Use HRA exemption calculator of ClearTax.

How much HRA can be claimed without proof?

50% of basic salary and DA – Rs 1,62,000 (50%(Rs 25,000+Rs 2,000)12