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How much HRA can you claim in the tax return?

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Ganga Ganga
Answered on December 31,2019

The conditions that make you eligible for HRA exemption are:

You are employed as a salaried professional (self-employed individuals cannot claim HRA) You are living in a rented house/flat Your rent amount is more than 10% of your salary

You receive HRA in your salary breakage HRA is calculated as the least of the rent allowance or HRA offered by your employer, The payable rent amount minus 10% of your basic salary For people living in a metro city, 50% of their basic salary; for people living in a non-metro city, 40% of their basic pay Whichever, out of the three, is the least value, the same will be permitted as tax exemption on the HRA.

Important considerations of HRA exemption:

If the payable rent is more than Rs 1,00,000, it is mandatory to provide the landlord's PAN to claim HRA exemption. In case the landlord does not hold a PAN in his/her name, a signed declaration regarding the same would be enough. You should also note that the HRA varies from one location to another and as per the professional employment too. For instance, employees of the central government can avail of the minimum and the maximum of HRA depending on the three categories (X, Y, Z) of cities in the line with recommendations of the 7th Pay Commission.

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