In terms of section 10(13A) & Rule 2A of the amended finance act 2020, a salaried person can claim the exemption in respect of House Rent Allowance received from his/her employer. The least of the following three amounts is exempt from income tax:
a) Actual HRA Received
b) 40% of Salary* (50%, if house situated in Mumbai, Calcutta, Delhi or Madras)
c) Rent paid minus 10% of salary
* Salary = Basic + DA (if part of retirement benefit) + Turnover based Commission
Note:
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