HRA Exemption Formula & Landlord PAN Mandates
Under Section 10(13A) read with Rule 2A of the Income Tax Rules, salaried employees opting for the Old Tax Regime can claim tax exemptions on rental housing expenditure.
Exempt HRA = Lowest of:
1. Actual HRA Received
2. Rent Paid − 10% of (Basic Pay + DA)
3. 50% of Basic Pay (Metros) or 40% (Non-Metros)
1. Actual HRA Received
2. Rent Paid − 10% of (Basic Pay + DA)
3. 50% of Basic Pay (Metros) or 40% (Non-Metros)
1. Tax Regime Applicability
HRA exemption is solely claimable under the Old Tax Regime. Under the default New Tax Regime, exemptions under Section 10(13A) are not permissible in lieu of the enhanced ₹75,000 standard deduction.
2. Mandatory Landlord PAN Threshold (₹1 Lakh/year)
If your annual rent paid exceeds ₹1,00,000 (i.e. ₹8,334/month), you must report the landlord's Permanent Account Number (PAN) to your employer for Form 16 TDS compliance.