Tag: Rent

Landlord’s PAN for HRA Exemption: When It Is Mandatory

Posted on by CA Meet Dhrangadhariya

Last updated: 06 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • You must give your landlord’s PAN to your employer if the rent you pay in the year is more than ₹1,00,000 (about ₹8,333 a month).
  • If the landlord has no PAN, a declaration from the landlord with name and address is accepted.
  • Form 124 (earlier Form 12BB) asks for the landlord’s name, address, PAN, Aadhaar, relationship and rent paid; Aadhaar is not mandatory unless your employer asks.
  • The HRA exemption is only for the old tax regime. Rent paid to a spouse is not accepted, and rent to parents needs them to report the income.

If you claim the HRA exemption and pay a high rent, you must give your employer the landlord’s PAN. The rule is meant to make sure the rent is real and that the landlord reports it as income.

The rule

  • If the rent you pay in the year is more than ₹1,00,000 (about ₹8,333 a month), the landlord’s PAN must be given. The Income Tax Department’s FAQ on Form 124 says the PAN must be furnished if the annual rent exceeds ₹1,00,000.
  • If the rent is ₹1,00,000 or less, the PAN is not required, but you still give the landlord’s name and address.
  • Aadhaar is not mandatory unless your employer specifically asks for it.

If the landlord has no PAN

Get a declaration from the landlord that they do not have a PAN, stating their name and address, as allowed by CBDT Circular 8/2013 dated 10/10/2013. Give it to your employer with your other documents. The declaration should be from the landlord, not from you.

Where do you give it?

In Form 124, the statement to your employer. Up to FY 2025-26 this was Form 12BB. For HRA it asks for:

  1. Name of the landlord.
  2. Address.
  3. PAN.
  4. Aadhaar number.
  5. Relationship with the landlord, if any.
  6. Rent paid to the landlord.

A copy of the rent agreement is the supporting document. Form 124 is given to your employer. It is not uploaded on the income tax portal.

Other conditions for the HRA exemption

  • You must be getting HRA from your employer and be in the old tax regime.
  • You must actually pay rent for a house that you do not own.
  • Rent paid to your spouse is not accepted. If you pay rent to your parents, they must own the house and show the rent as income in their return.
  • The exemption is the lowest of the HRA received, 50% (eight metro cities) or 40% of salary, and rent paid less 10% of salary.

Documents to keep

  • Rent agreement.
  • Rent receipts or, better, bank proof of payment each month.
  • Landlord’s PAN or the landlord’s no-PAN declaration.
  • Salary slips showing HRA.

If you do not give the proof

  • Your employer can refuse the exemption and deduct higher TDS.
  • You can still claim the exemption in your return if you have the proof, and get a refund of the excess TDS.
  • A claim without proof may be questioned by the department.

TDS on rent is a separate matter

The tenant’s own TDS duty on rent is different from the HRA rule. For example, an individual paying rent above ₹50,000 a month must deduct tax at source on it (section 194-IB of the 1961 Act, with a new section number in the 2025 Act). Check the current rate and conditions with your professional.

Frequently asked questions

When is landlord PAN required for HRA?

When the rent you pay in the year is more than ₹1,00,000, that is above about ₹8,333 a month.

What if the landlord does not have a PAN?

Give your employer a declaration from the landlord that they do not have a PAN, along with their name and address.

Is Aadhaar required?

Form 124 asks for the landlord’s Aadhaar, but it is not mandatory unless your employer specifically asks for it.

Can I claim HRA without giving rent proof?

Your employer may refuse the exemption and deduct more TDS. You can still claim it in your return if you have the proof.

Is the HRA exemption available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Can You Claim Both HRA and Home Loan Interest Deduction?

Posted on by CA Meet Dhrangadhariya

Last updated: 31 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Yes, you can claim the HRA exemption and home loan interest together if you pay rent for a house you do not own and also have a home loan on another house.
  • The HRA rule needs that the house you live in is not owned by you and that you actually pay rent for it. It does not stop you owning a different house.
  • Interest on a self-occupied house is limited to ₹2 lakh; interest on a let-out house has no such cap on the interest itself.
  • Both claims need genuine proof and, for HRA, the old tax regime. In the new regime, HRA and self-occupied house interest are not allowed.

Many people think they must choose between HRA and a home loan. They do not. The two work on different houses and different heads of income, so they can be claimed together if you meet the conditions of each. Both are claimed in the old tax regime.

The HRA conditions

The HRA exemption is in section 10(13A) of the Income-tax Act, 1961 up to FY 2025-26, and in Schedule III (Table Sl. No. 11) of the Income-tax Act, 2025 from Tax Year 2026-27. It needs:

  • an HRA granted to you by your employer for rent,
  • the house you occupy is not owned by you, and
  • you actually pay rent for that house.

The exemption is the lowest of the HRA received, 50% (eight metro cities) or 40% of salary, and rent paid less 10% of salary (Rule 279 of the Income-tax Rules, 2026).

Nothing in these conditions stops you owning another house elsewhere.

The home loan conditions

Interest on a loan taken to buy or build a house is a deduction from house property income: section 24(b) of the 1961 Act, section 22(1)(b) of the 2025 Act.

  • For a self-occupied house the interest is limited to ₹2 lakh a year, if the house is bought or built within five years from the end of the year in which the loan was taken. Otherwise the limit is ₹30,000.
  • Interest paid before the house is completed is claimed in five equal parts from the year of completion.
  • For a let-out house the interest is deducted in full, but the loss from house property that you can set off against other income is limited to ₹2 lakh a year.
  • Principal repaid is a separate section 80C (section 123) deduction.

Four common situations

Situation HRA and interest together? Note
Own a house in another city and rent a house where you work Yes The usual case.
Own a house in the same city but rent another for a genuine reason, such as distance to work or a school Yes, if genuine Keep full proof of both.
Bought an under-construction flat and live on rent Yes Pre-completion interest is claimed in five equal parts after completion.
Rent out your own loan-financed house and live in a rented house elsewhere Yes The rent you receive is taxed as house property income, and the interest is deducted against it.

A house kept vacant, or used by your family, is generally treated as self-occupied for the interest limit.

Example

Aryan works in Gurgaon, pays rent of ₹10,000 a month and gets an HRA of ₹15,000 a month. His basic salary is ₹40,000 a month. He has a home loan for a house in Bengaluru where his parents live, with interest of ₹20,000 a month.

HRA exemption (monthly): the lowest of ₹15,000 (HRA received), ₹16,000 (40% of basic, as Gurgaon is not one of the eight metro cities) and ₹6,000 (rent ₹10,000 less ₹4,000, which is 10% of basic). So ₹6,000 a month, ₹72,000 a year, is exempt and ₹9,000 a month is taxable.

Interest: ₹2,40,000 a year, but for a self-occupied house the deduction is limited to ₹2,00,000.

New tax regime

In the new regime neither HRA nor interest on a self-occupied house is allowed. Interest on a let-out house is still allowed against the rent received.

Proof you need

  • Rent agreement, rent receipts or bank proof, and the landlord’s PAN if rent is above ₹1,00,000 a year.
  • The lender’s interest certificate, the loan agreement and the possession or completion papers.
  • The declaration to your employer in Form 124 (earlier Form 12BB).

Frequently asked questions

Can I claim HRA and home loan interest together?

Yes, if you live in a rented house that you do not own, pay rent, and have a home loan on a different house, in the old tax regime.

Can I claim both if the loan house is in the same city?

The law does not bar it, but the claim must be genuine, for example because the house is let out, too far from work or under construction. Keep full proof.

What is the limit on home loan interest?

₹2 lakh a year for a self-occupied house, if construction or purchase is completed within five years of the year the loan was taken. Otherwise ₹30,000.

Is this available in the new tax regime?

No. HRA and the interest on a self-occupied house are not allowed in the new regime. Interest on a let-out house is allowed.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

What is House Rent Allowance (HRA): Exemption, Calculation and New Rules 2026

Posted on by CA Meet Dhrangadhariya

Last updated: 29 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • HRA is partly or fully tax-free for a salaried employee who pays rent, but only in the old tax regime.
  • The exemption is the lowest of actual HRA, 50% (metro) or 40% (non-metro) of salary, and rent paid minus 10% of salary.
  • From 01/04/2026 the 50% limit applies to eight cities: Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad and Ahmedabad.
  • Landlord PAN is needed if yearly rent exceeds ₹1 lakh. Without HRA, rent can be claimed under section 80GG (section 134 in the new Act), up to ₹60,000 a year.

How to calculate the HRA exemption

1. Take the actual HRA received in the year
↓
2. Take 50% (8 metro cities) or 40% (other cities) of salary
↓
3. Take rent paid minus 10% of salary
↓
4. The lowest of the three is the exempt HRA
↓
5. The rest of the HRA is taxable as salary

House Rent Allowance (HRA) is a part of salary paid by the employer to meet the cost of rented accommodation. A part of it is exempt from tax if you live in a rented house and pay rent, provided you file under the old tax regime. It cannot be claimed in the new regime.

HRA eligibility: who can claim?

Person HRA exemption?
Salaried, with HRA in the salary Yes, in the old regime
Self-employed No, but section 80GG may apply
Salaried without an HRA component No, but section 80GG may apply
Paying rent to parents Yes, with conditions
Paying rent to spouse No
New tax regime No

How is the HRA exemption calculated?

The exempt amount is the lowest of:

  1. The actual HRA received.
  2. 50% of salary if you live in one of the eight metro cities, or 40% of salary elsewhere.
  3. Rent paid minus 10% of salary.

Salary here means basic pay plus dearness allowance, but dearness allowance counts only if the terms of employment provide for it. All other allowances and perquisites are left out. Rent and salary are taken only for the months you actually lived in the rented house. The part of HRA that is not exempt is taxed as salary.

New rules from 01/04/2026

The Income-tax Rules, 2026 (notified on 20/03/2026) apply from 01/04/2026. HRA limits are now in Rule 279, which replaces Rule 2A. Two changes matter for HRA:

  • The 50% limit, earlier given only to Delhi, Mumbai, Chennai and Kolkata, now also covers Bengaluru, Pune, Hyderabad and Ahmedabad, so eight cities in all.
  • The declaration to the employer now asks for the landlord’s relationship to you and other landlord details, The declaration form that replaces Form 12BB is Form 124 (Rule 205 of the 2026 Rules). It asks for the landlord’s name, address, PAN, Aadhaar, relationship with you, if any, and the rent paid.

HRA in the Income-tax Act, 2025

For FY 2025-26 (assessment year 2026-27) HRA is exempt under section 10(13A) of the 1961 Act. From Tax Year 2026-27 it falls under section 11 read with Schedule III of the Income-tax Act, 2025, and the rent deduction for those without HRA (section 80GG) moves to section 134.

Example of HRA calculation

Mr Anwar pays rent of ₹18,000 a month in FY 2025-26. His basic salary is ₹27,000 a month (₹3,24,000 a year) and his HRA is ₹1,62,000 a year. He is under the old regime. The calculation below uses the metro (50%) limit and the non-metro (40%) limit.

Particulars Metro city Other city
Actual HRA ₹1,62,000 ₹1,62,000
50% or 40% of salary (₹3,24,000) ₹1,62,000 ₹1,29,600
Rent paid (₹2,16,000) less 10% of salary (₹32,400) ₹1,83,600 ₹1,83,600
Exempt HRA (lowest) ₹1,62,000 ₹1,29,600
Taxable HRA Nil ₹32,400

If Mr Anwar opts for the new regime, the whole HRA of ₹1,62,000 is taxed at slab rates.

Old regime or new regime?

Choose the old regime only if the total of HRA, 80C, 80D, home loan interest and other deductions is large enough to beat the lower slabs of the new regime. High rent in a metro city and a high HRA make the old regime more attractive. Low rent and few deductions usually favour the new regime.

Documents for HRA

You need not file proofs with the return, but keep them for your employer and for any notice from the department:

  1. Rent receipts.
  2. Rent agreement.
  3. Bank proof of rent payment.
  4. The rent declaration given to your employer (Form 12BB until 31/03/2026).
  5. Salary slip showing HRA.
  6. Landlord’s PAN, if the rent in the year is more than ₹1,00,000.

If the landlord has no PAN, get a declaration to that effect from the landlord, as provided in CBDT Circular 8/2013 dated 10/10/2013.

Special cases

Rent paid to parents

You can claim HRA for rent paid to your parents if you genuinely pay it, for example by bank transfer, and your parents declare it as rental income in their return. Rent paid to a spouse is not allowed.

HRA and home loan together

If you own a house in one city and pay rent in another, for example because of a job transfer, you can claim both the HRA exemption and home loan interest. Conditions apply if both are in the same city, so take advice.

Rent deduction if you do not get HRA: section 80GG

Self-employed persons and employees who get no HRA can claim rent paid under section 80GG (section 134 from Tax Year 2026-27), in the old regime only. The deduction is the lowest of:

  • ₹5,000 a month, that is ₹60,000 a year,
  • 25% of adjusted total income, or
  • rent paid minus 10% of adjusted total income.

You (and your spouse and minor children) must not own a residential house at the place where you live or work, and you must file Form 10BA (Form 31 under the 2026 Rules from 01/04/2026) as a declaration.

Frequently asked questions

Is HRA available in the new tax regime?

No. The HRA exemption can be claimed only under the old tax regime.

Which cities get the 50% HRA limit?

From 01/04/2026: Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Pune, Hyderabad and Ahmedabad.

Is landlord PAN required?

Yes, if the rent paid in the year is more than ₹1,00,000. If the landlord has no PAN, a declaration to that effect from the landlord is needed.

Can I claim HRA for rent paid to my parents?

Yes, if you actually pay the rent and your parents show it as income in their return. Rent paid to a spouse is not allowed.

Can I claim HRA and home loan interest together?

Yes, if the conditions are met, for example when you live in a rented house in one city and own a house in another.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.