House Rent Allowance (HRA) is a component of a salaried employee’s income that is paid by an employer to help cover the cost of renting a home. In India, HRA is partially or fully exempt from income tax under Section 10(13A) of the Income Tax Act, subject to certain conditions. It plays a key role in reducing an individual’s tax liability, provided they live in rented accommodation and can furnish rent receipts.
The amount of HRA exemption depends on factors such as the employee’s salary, the HRA received, rent paid, and the city of residence (metro or non-metro). Employees must submit proof of rent payments during income tax filings to claim the benefit. If the rent paid exceeds ₹1,00,000 annually, the landlord’s PAN is also required.
HRA is especially relevant during income tax return filing season, and both employers and employees must ensure accurate documentation for compliance. For businesses managing payroll or individuals planning their tax-saving strategies, understanding HRA is crucial.
To know how HRA affects your tax filings and how to claim it effectively, visit FinTax24's Income Tax Solutions.