HRA is an allowance provided by employers to assist employees in meeting their accommodation expenses.
Tax exemption for HRA is available under Section 10(13A) of the Income Tax Act.
The exempted HRA amount is the least of:
Actual HRA received.
Actual rent paid minus 10% of salary.
50% of salary in metro cities, 40% in non-metro cities.
Taxpayer can claim both HRA and deductions on a Home Loan under certain conditions.
If HRA is not received, taxpayers can claim deduction under Section 80GG, subject to conditions.