Work out how much of your House Rent Allowance is exempt from tax. Covers the three-condition test, metro and non-metro limits, and the taxable balance.
Which cities count as metro?
Only four: Mumbai, Delhi, Kolkata, and Chennai. Bengaluru, Hyderabad, Pune, and Gurugram do not, however expensive the rent is. The rule names those four and nothing else.
Can I claim HRA in the new tax regime?
No. The exemption is one of the deductions the new regime gives up in exchange for wider slabs and a larger standard deduction. If your HRA exemption is large, run the income tax calculator both ways before you choose.
Can I pay rent to my parents?
Yes, if the arrangement is real. They must own the home, you must actually pay, and they must declare that rent as their income. Keep the bank transfers and a rent agreement. A paper trail is what survives a query.
Do I need my landlord PAN?
Above a rent threshold, yes, and it is the commonest refusal there is: without the PAN the payroll team can refuse the exemption at source however right your arithmetic is, and you are left claiming it in your return. This page names the requirement and quotes no figure for the threshold, because it is set by a CBDT circular that could not be read from here. The number is printed on your employer’s own rent declaration form, which is where you would act on it in any case.
What if I moved city or changed jobs mid-year?
Work out each period on its own and add the results. The rule applies month by month, so a half year in Chennai at 50% and a half year in Coimbatore at 40% are two separate sums, not one average.
Does my whole salary count in the formula?
No. Only basic pay, dearness allowance that forms part of retirement benefits, and commission fixed as a percentage of turnover. Bonuses, other allowances, and perquisites stay out of it.