2026-10-23

India Finance Research Brief: House rent allowance: how the exemption is computed

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Educational explainer: House rent allowance: how the exemption is computed

Salaried employees who receive HRA and pay rent may claim part of it as exempt under the old tax regime. The exempt amount is the lowest of a few statutory limits, based on salary, rent paid and city.

What to check:

  • The current rule in the Act and Rules, including the city classification.
  • That you have rent receipts and a rental agreement, and the landlord's PAN where rent exceeds the prescribed threshold.
  • That the exemption is generally not available under the default new regime.

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