HRA exemption is the MINIMUM of three amounts: (1) Actual HRA received from employer, (2) 50% of Basic + DA for metro cities or 40% for non-metro cities, (3) Rent paid minus 10% of Basic + DA. The lowest of these three is your tax-exempt HRA.
Which cities are considered metro for HRA?+
For HRA calculation, metro cities are Delhi, Mumbai, Chennai, and Kolkata. All other cities including Bangalore, Hyderabad, Pune, Ahmedabad are considered non-metro (40% rule applies instead of 50%).
Can I claim HRA if I have a home loan?+
Yes, you can claim both HRA exemption and home loan benefits simultaneously if you live in a rented house in one city while owning property in another city. However, you cannot claim HRA for rent paid on your own house.
Is HRA available under the new tax regime?+
No. HRA exemption under Section 10(13A) is NOT available if you choose the new tax regime (Section 115BAC). You must opt for the old tax regime to claim HRA exemption. Compare both regimes to see which gives you lower tax.