What HRA exemption applies on just ₹8,000 rent in a small city?
Paying ₹8,000 monthly rent in a non-metro city, with ₹3,00,000 basic salary and ₹1,20,000 HRA received, the exempt HRA amount is about ₹66,000 — ₹54,000 remains taxable.
What is HRA exemption?
Under Section 10(13A), the HRA exemption is the least of: actual HRA received, rent paid minus 10% of basic salary, or 50% of basic salary (metro) / 40% (non-metro). Only available under the old tax regime.