How to claim HRA: rent receipts, rules & proofs
Quick answer: Your tax-free HRA is the least of three amounts — (1) the actual HRA you receive, (2) rent paid minus 10% of salary, and (3) 50% of salary (metro) or 40% (non-metro). It's available only in the old tax regime, and you'll need rent receipts — plus the landlord's PAN if annual rent crosses ₹1,00,000.
What is HRA?
House Rent Allowance is a part of your salary meant to cover rent. If you actually pay rent, part of that allowance is exempt from tax under Section 10(13A). The key word is part — the exemption is capped by a formula, not the full HRA.
The least-of-three rule
Your exempt HRA is the smallest of these three:
- The actual HRA received from your employer.
- Rent paid − 10% of salary.
- 50% of salary if you live in a metro (Delhi, Mumbai, Kolkata, Chennai), otherwise 40%.
Here, salary = basic pay + dearness allowance (the part that counts towards retirement benefits) + any commission as a fixed percentage of turnover. Whatever's left of your HRA after the exemption is added to your taxable income.
Proofs your employer (and the I-T department) will want
- Rent receipts — usually monthly, signed by the landlord, showing the amount, period and address.
- Landlord's PAN — mandatory if your annual rent exceeds ₹1,00,000 (about ₹8,333/month).
- Rent agreement — many employers ask for it, especially for higher rents.
- Proof of payment — bank transfer or UPI is cleaner than cash.
Common situations
- Rent to parents: allowed if you genuinely pay a parent who owns the home — keep receipts and pay by bank transfer. The rent is taxable in your parent's hands.
- No HRA in your salary? You may still claim a deduction for rent under Section 80GG, subject to its own limits.
- Own a home but rent elsewhere for work: you can usually claim HRA on the rented home and the home loan benefit on the owned one — conditions apply.
Remember: old regime only
HRA exemption is not available in the new tax regime. Before you bank on it, check whether the old regime is actually cheaper for you overall — see our guide on the old vs new tax regime, or compare directly in the Income Tax Calculator.
Frequently asked questions
How is HRA exemption calculated?
Your tax-free HRA is the least of three amounts: the actual HRA received; rent paid minus 10% of salary; and 50% of salary for metro cities or 40% for non-metro.
Do I need my landlord's PAN to claim HRA?
Yes, if your annual rent exceeds ₹1,00,000 you must report the landlord's PAN to your employer. Below that, rent receipts are usually enough.
Can I claim HRA in the new tax regime?
No. HRA exemption under Section 10(13A) is available only in the old tax regime.
Can I claim HRA for rent paid to my parents?
Yes, if you genuinely pay rent to a parent who owns the home. Keep proof of payment and rent receipts, and remember the rent is taxable income in your parent's hands.
General explainer, not tax advice. Rules can change — verify against the current Income Tax Act and consult a professional for your situation.