House Rent Allowance (HRA) is one of the key components of your annual salary package, but you will be surprised to know that not all of it is exempt from tax liability. There are specific conditions set by the Income Tax Department regarding the amount of HRA that is exempt from tax calculation. Under Section 10(13A), HRA as a part of your salary can be claimed as an exemption, partially or fully.
So, if you are employed and live in a rented house, you can avail the benefit of HRA while filing your Income Tax Return (ITR). However, one question comes to mind for many people every year – is it necessary to provide a rent receipt every time to claim HRA?
So the answer is – no, not every time. If your annual rent is less than Rs 36,000 or Rs 3,000 per month, then you can claim HRA even without any receipt or PAN of the tenant.
What are the rules for HRA?
According to the rules of the Income Tax Department, if you are in a job and your salary includes HRA, then you can claim it for tax exemption. But there are some conditions for this:
-You are living in a rented house
-HRA is a part of your salary
-You have chosen the old tax regime – HRA exemption is not available in the new tax system
Also read: Income tax refund 2025: 6 smart tips to get a bigger refund and earn more interest
How much exemption can be availed without a receipt?
If you have paid rent of less than Rs 36,000 in a year or Rs 3,000 per month, then you can claim HRA even without a rent receipt. The Income Tax Department does not ask for any document for this.
But if you have paid rent of Rs 1 lakh or more in a year, i.e. more than Rs 8,333 per month, then you will have to provide some documents, such as: Rent receipt; proof of rent payment (bank/UPI transaction); and tenant’s PAN number.
How is HRA calculated?
When you claim HRA exemption, the Income Tax Department gives exemption on the amount which is the lowest of the three rules given below:
-Amount of HRA included in your salary
-Your total rent – 10% of basic salary
-40% of basic salary (50% if you are in a metro city)
Why has the focus on HRA increased?
This time, there has been a change in the ITR forms. A new validation system has been implemented, in which the system automatically matches the information given in the form. If you have claimed HRA but do not have the necessary documents, then the claim may be rejected or you may be considered a tax defaulter.
Therefore, from this time it is advised that if you are claiming HRA, then keep all its documents ready, especially when the rent is more than Rs 8,000.
Who will get the benefit of HRA claim?
-Salaried people whose salary includes HRA
-Those who have opted for the old tax system
-Those who do not live in their own house
-Those who pay rent on the basis of rent agreement
Things to keep in mind
-HRA can be claimed without receipt for up to Rs 3,000 per month or Rs 36,000 per year
-Rent above Rs 1 lakh per year requires PAN and receipt
-New tax system does not have HRA benefit
-Factory for providing incorrect information may result in penalty or claim rejection
Also read: Income Tax Returns: Netizens flag login, technical errors as ITR filing begins after delay
Summing up…
If you live on rent and your salary includes HRA, then you must take advantage of it while filing ITR this year as well. Yes, documents are required only if the rent is more than ₹1 lakh per annum. If the rent is less, then you can avail the exemption without any paperwork hassle.
The last date for filing ITR is getting closer, in such a situation, if you keep your documents ready in time, then along with the tax exemption, the return will also be submitted without any interruption.