Question 1

How is HRA exemption calculated?

Accepted Answer

HRA exemption is the minimum of three amounts: (1) Actual HRA received, (2) 50% of Basic+DA for metro cities or 40% for non-metro, and (3) Rent paid minus 10% of Basic+DA. The lowest of these three is your tax-exempt HRA.

Question 2

Which cities are considered metro for HRA?

Accepted Answer

Delhi (NCR), Mumbai, Chennai, and Kolkata are considered metro cities for HRA calculation. For these cities, HRA exemption is 50% of Basic+DA. For all other cities, it is 40%.

Question 3

Can I claim HRA if I live with parents?

Accepted Answer

Yes, you can claim HRA exemption even if you pay rent to your parents. You need a rent agreement and proof of payment. Your parents must declare this rental income in their tax return.

Question 4

Is HRA available under the new tax regime?

Accepted Answer

No, HRA exemption under Section 10(13A) is only available under the old tax regime. Under the new regime, you cannot claim HRA exemption.