What HRA exemption covers
HRA exemption is normally the minimum of actual HRA, rent paid minus 10% of salary, and 50% or 40% of salary depending on metro classification. Any expansion of the 50% city list must be applied only from the notified year and after employer payroll software is updated.
Situations this page is built for
- Employee in Bengaluru, Pune, Hyderabad or Ahmedabad checking whether 50% rate is available.
- Employer updating payroll declarations.
- Salaried taxpayer comparing old vs new regime.
- Employee trying to revise rent proof or Form 16 computation.
Documents and details to keep ready
- Rent agreement and rent receipts.
- Landlord PAN if annual rent exceeds threshold.
- Salary breakup with basic and HRA.
- City of residence and period of stay.
- Employer declaration and Form 16.
Process
Clarify facts
Identify the exact year, state, form, portal status, transaction type and statutory deadline.
Reconcile records
Match notices, books, portal data, invoices, challans and bank entries before filing or replying.
Prepare submission
Draft the filing, response, registration application, calculation or project scope with supporting records.
Track outcome
Download acknowledgements, respond to clarifications and keep a clean record trail.
Common mistakes
- Claiming the 50% rate for a city/year before notification.
- Using CTC instead of basic salary.
- Not reducing 10% of salary from rent.
- Claiming HRA while living in own house.
HRA Exemption - 8 City Update Tracker: year and source check
Last fact-checked: 25 May 2026.
AY 2026-27 means FY 2025-26 income under the Income-tax Act, 1961. Tax Year 2026-27 means FY 2026-27 income under the Income Tax Act, 2025. Do not mix the two labels.
If a rate, city list or penalty is described as new for 2026, insist on the exact official notification or portal instruction before applying it.
Use official portal pages, CBDT notifications, the supplied Act PDF and ICAI material before making a filing, payroll, TDS/TCS or rebate decision.
FAQs
Which year should I use for HRA Exemption - 8 City Update Tracker?
Use AY 2026-27 for FY 2025-26 income under the Income-tax Act, 1961. Use Tax Year 2026-27 for FY 2026-27 income under the Income Tax Act, 2025.
What documents should I share with a tax expert?
Share the portal screenshot, exact year, income breakup, certificates, AIS/Form 26AS, notices, challans and any computation already prepared.
Can WorkIndex help me find a specialist?
Yes. Post a requirement with the legal year, records and deadline so experts can quote on the real issue instead of a generic page title.
HRA Exemption - 8 City Update Tracker: year and source check
Last fact-checked: 25 May 2026.
AY 2026-27 means FY 2025-26 income under the Income-tax Act, 1961. Tax Year 2026-27 means FY 2026-27 income under the Income Tax Act, 2025. Do not mix the two labels.
If a rate, city list or penalty is described as new for 2026, insist on the exact official notification or portal instruction before applying it.
Use official portal pages, CBDT notifications, the supplied Act PDF and ICAI material before making a filing, payroll, TDS/TCS or rebate decision.
What to verify for HRA Exemption - 8 City Update Tracker
- Correct financial year, assessment year or tax year.
- Taxpayer type, age category, residential status and business/profession status.
- Exact income heads, including salary, house property, business/profession, capital gains, VDA and other sources.
- AIS/TIS, Form 26AS, TDS/TCS certificates, challans and portal pre-fill.
- Deductions/exemptions allowed in the selected regime and current ITR utility validation rules.
- Whether the issue is a calculation, filing, notice response, rectification, appeal or advisory position.
HRA Exemption - 8 City Update Tracker: year and source check
Last fact-checked: 25 May 2026.
AY 2026-27 means FY 2025-26 income under the Income-tax Act, 1961. Tax Year 2026-27 means FY 2026-27 income under the Income Tax Act, 2025. Do not mix the two labels.
If a rate, city list or penalty is described as new for 2026, insist on the exact official notification or portal instruction before applying it.
Use official portal pages, CBDT notifications, the supplied Act PDF and ICAI material before making a filing, payroll, TDS/TCS or rebate decision.
What to verify for HRA Exemption - 8 City Update Tracker
- Correct financial year, assessment year or tax year.
- Taxpayer type, age category, residential status and business/profession status.
- Exact income heads, including salary, house property, business/profession, capital gains, VDA and other sources.
- AIS/TIS, Form 26AS, TDS/TCS certificates, challans and portal pre-fill.
- Deductions/exemptions allowed in the selected regime and current ITR utility validation rules.
- Whether the issue is a calculation, filing, notice response, rectification, appeal or advisory position.