How to calculate House Rent Allowance (HRA) Exemption
House Rent Allowance exemption under section 10(13A) is allowed if Salaried individuals getting House Rent Allowance as part of salary and full fill below two conditions:
He has taken a residential accommodation in which he resides on rent.He has not occupied such property in which he resides.
If you don’t live in a rented accommodation. You live with your parents in their house. In that case also, you can claim HRA. However there should be a rent agreement, and parents must show this rental income in their Income Tax Return.
HRA Exemption can be claimed whichever is least on the following basis:-
Actual HRA Received
Rent paid minus 10% of Salary
40% of salary if he resides in Non Metro City or 50% of salary if resides in Metro City.
If rent paid during the financial year exceeds Rs.1,00,000, PAN of landlord is necessary.