Question 1

How is HRA exemption calculated?

Accepted Answer

HRA exemption = Minimum of: (1) Actual HRA received, (2) 50% of basic for metro / 40% for non-metro, (3) Rent paid minus 10% of basic salary. The lowest of these three is your tax-free HRA.

Question 2

Which cities are metro for HRA?

Accepted Answer

Only Delhi, Mumbai, Kolkata, and Chennai are classified as metro cities for HRA exemption (50% of basic). All other cities including Bangalore, Hyderabad, Pune, and Ahmedabad are non-metro (40% of basic).

Question 3

I own a house but also pay rent. Can I claim HRA?

Accepted Answer

Yes, if you live in a rented house and own a house in a different city. You can claim both HRA exemption and home loan interest deduction. But if both are in the same city, the tax department may question it.

Question 4

No HRA component in salary. Can I still save tax on rent?

Accepted Answer

Yes. Under Section 80GG, individuals not receiving HRA can claim up to ₹60,000/year deduction for rent paid. Conditions: you, spouse, or minor child should not own a house in the city of employment.

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