HRA 50% Rule Explained — Metro City Exemption
In metros, HRA exemption is capped at 50% of basic salary. For basic ₹6L: max 50% component = ₹3L. The actual exempt amount is the minimum of (a) HRA received, (b) 50% of basic, (c) rent paid minus 10% of basic.
HRA Exempt (Tax-Free)
₹1,80,000
HRA Taxable
₹1,20,000
HRA exemption = minimum of: (1) HRA received, (2) 50%/40% of basic for metro/non-metro, (3) Rent paid minus 10% of basic. Only applicable under Old Tax Regime.
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