Income Tax · Salary
Sec 10 13a Of Income Tax Act (India, 2026)
Section 10(13A) gives salaried people who live in rented accommodation a way to keep part of their house rent allowance out of tax. It is one of the most valuable salary exemptions in the old tax regime, but it comes with conditions, a specific calculation, and a document trail that the department can ask for. This guide explains exactly how the HRA exemption under section 10(13A) is worked out, who can claim it, what proof you need, and why it does not apply if you are in the new regime.
- What it is: section 10(13A) exempts part of HRA for salaried people who actually pay rent.
- Exempt amount: the least of actual HRA, rent paid minus 10% of salary, and 50% (metro) or 40% (non-metro) of salary.
- Metro cities: Delhi, Mumbai, Kolkata and Chennai count as metro for the 50% test.
- Proof: keep rent receipts or agreement, proof of payment, and landlord PAN if rent crosses the notified limit.
- New regime: HRA exemption is generally not available; it is an old-regime benefit.
- No rent, no HRA: no exemption if you pay no rent or your salary has no HRA component.
01What section 10(13A) is
Section 10(13A) of the Income-tax Act exempts part of the house rent allowance (HRA) your employer pays you, provided you actually pay rent for the home you live in. The exempt part is not added to your taxable salary; the rest is taxed normally.
HRA is a salary component, so this exemption is only for salaried employees who receive HRA. If you do not receive HRA, a separate deduction under section 80GG may help instead, but that is a different provision with its own limits.
You must actually pay rent
The exemption is for rent genuinely paid. If you live in your own home, or pay no rent, you cannot claim HRA exemption even if your salary includes an HRA component. The HRA you receive is then fully taxable.
02How the HRA exemption is calculated
The exempt HRA is the least of these three amounts:
| # | Amount | Notes |
|---|---|---|
| 1 | Actual HRA received from the employer | The HRA component in your salary |
| 2 | Rent paid minus 10% of salary | Salary here means basic plus dearness allowance (and commission on a fixed percentage, where applicable) |
| 3 | 50% of salary (metro) or 40% of salary (non-metro) | Metro cities are Delhi, Mumbai, Kolkata and Chennai |
You compute all three and take the smallest. That smallest figure is the amount exempt under section 10(13A). Anything above it is taxable. "Salary" for this purpose generally means basic salary plus dearness allowance that forms part of retirement benefits, plus commission at a fixed percentage of turnover where that applies.
03A worked example
Suppose you live in Mumbai (a metro), with basic salary plus dearness allowance of Rs 6,00,000 a year, HRA of Rs 3,00,000, and rent paid of Rs 3,60,000.
- Actual HRA received: Rs 3,00,000.
- Rent paid minus 10% of salary: Rs 3,60,000 minus Rs 60,000 = Rs 3,00,000.
- 50% of salary (metro): Rs 3,00,000.
Here all three happen to be Rs 3,00,000, so the exempt HRA is Rs 3,00,000. In most real cases the three figures differ, and the smallest one is your exemption. The rest of the HRA is added to taxable salary.
04Conditions and documents
To claim and support the exemption, keep these ready:
- Rent receipts or a rent agreement showing the rent paid.
- Landlord PAN if your annual rent crosses the limit at which reporting the landlord's PAN is required.
- Proof of payment, such as bank transfers, which is stronger than cash.
Your employer applies HRA exemption in your TDS if you submit proof during the year. If you miss that, you can still claim it when you file your return. Keep the documents, because a mismatch between claimed HRA and reported income can trigger a query. For how such mismatches surface in processing, see section 143(1)(a).
05When HRA does not apply
The HRA exemption under 10(13A) is not available in a few common situations:
- New tax regime: HRA exemption is generally not allowed. If you need HRA, the old regime is usually the route.
- No rent paid: living in your own home or rent-free accommodation means no exemption.
- No HRA component: if your salary has no HRA, you cannot claim 10(13A); consider 80GG instead.
So HRA is a reason many people compare regimes carefully. If you later realise you missed claiming it correctly, note that an updated return cannot be used just to increase a refund; see section 139(8A) for what an updated return can and cannot do.
06How Claw Tax helps
Claw Tax and Accounts is an online tax, GST and accounting service for India that connects you with a verified chartered accountant at a fixed, published price, with a Claw reviewer checking every filing before it is submitted.
Working out the least-of-three HRA exemption and filing a basic return is something you can do yourself for free on incometax.gov.in, and for a simple salary that is fine. People use Claw Tax and Accounts when HRA sits alongside other deductions and they want the old-versus-new regime call made correctly, when rent, landlord PAN or multiple cities complicate the maths, or when they want the return checked before it is filed. A verified chartered accountant computes the exemption, keeps the proof in order, and a Claw reviewer checks the return before submission, at a fixed, published price.
This is an online service, and it is not tax advice; a verified CA handles your specifics.
07Frequently asked questions
What is section 10(13A) of the Income-tax Act?
It is the provision that exempts part of the house rent allowance (HRA) your employer pays you from tax, as long as you actually pay rent for the home you live in. The exempt part is left out of taxable salary, and the remaining HRA is taxed normally. It applies to salaried employees who receive HRA.
How is the HRA exemption calculated?
The exempt HRA is the least of three amounts: the actual HRA received, the rent paid minus 10% of salary, and 50% of salary for metro cities or 40% for non-metro. Salary here generally means basic plus dearness allowance. You compute all three and take the smallest; the rest of the HRA is taxable.
Can I claim HRA exemption in the new tax regime?
Generally no. The HRA exemption under 10(13A) is an old-regime benefit and is not available in the new regime. If claiming HRA saves you meaningful tax, you usually need to be in the old regime. Compare both regimes with your actual deductions before choosing.
What documents do I need to claim HRA?
Keep rent receipts or a rent agreement showing the rent paid, proof of payment such as bank transfers, and the landlord's PAN if your annual rent crosses the limit at which reporting it is required. Submit proof to your employer during the year, or claim it when filing your return and keep the documents in case of a query.
Can I claim HRA if I live in my own house?
No. The exemption is only for rent genuinely paid. If you live in your own home or in rent-free accommodation, you cannot claim HRA exemption even if your salary includes an HRA component, and that HRA is then fully taxable. If you pay rent but receive no HRA, section 80GG may help instead.
Which cities count as metro for HRA?
For the HRA calculation, the metro cities are Delhi, Mumbai, Kolkata and Chennai, where the limb of the formula uses 50% of salary. All other cities are treated as non-metro and use 40% of salary. This affects the third amount in the least-of-three test.