Income Tax
HRA (House Rent Allowance)
Salary component that can be partially exempt from income tax if rent is paid.
Full Definition
House Rent Allowance (HRA) is a salary component given by employers toward accommodation expenses. HRA is exempt from income tax (Section 10(13A)) to the extent of the lowest of: (a) actual HRA received, (b) 50% of salary (metro cities) or 40% (non-metro), (c) actual rent paid minus 10% of salary. Rent receipts and landlord's PAN (if rent exceeds ₹1L/year) are required. HRA exemption is only available under the old tax regime.
Related terms
More Income Tax terms
ITR (Income Tax Return)
Annual declaration filed with India's Income Tax Department reporting income, deductions and tax paid.
AY (Assessment Year)
The year in which income earned in the previous financial year is assessed and taxed.
FY (Financial Year)
The 12-month period from April 1 to March 31 during which income is earned and recorded.
PAN (Permanent Account Number)
Unique 10-character alphanumeric identifier issued by the Income Tax Department to every taxpayer.
TAN (Tax Deduction Account Number)
10-character number required by entities that deduct or collect tax at source (TDS/TCS).