HOUSE Rent allownce EXEMPTION

Minimum of these will be considered to deduct from total TAXABLE Income

a) Actual HRA paid by the Employer (Generally companies pay 40%/50% of BASIC only ).
b) 40% of BASIC in Non Metros and 50% of BASIC in METROS.
c) Actual Rent paid - 10% of BASIC .

Example :
BASIC Rs 20000
HRA Rs 10000
Actually Paying rent Rs 12000
City Hyderabad

a) 10000 (Actual HRA paid by the Employer)
b) 8000 (40% of BASIC )
c) 10000 = 12000 - 2000(10% of 20000 ) (Actual Rent paid - 10% of BASIC)

8000 is Minimum so 96000 will be deducted form Taxable money.

Thumb rule : in your rent reciepts show 50% of basic .

PS :HRA exemption in described under Section 10 (13A) of the Income Tax act 1961