HRA exemption can be claimed for eligible rented accommodation anywhere in India.
HRA exemption can be claimed for eligible rented accommodation anywhere in India. The four-city list changes only the city limb from 40% to 50% of HRA salary; it does not determine basic eligibility.
This article uses the AY 2026–27 framework for income earned in FY 2025–26 under section 10(13A) of the Income-tax Act, 1961 read with Rule 2A. For this period, and in the current official departmental material reviewed on 1 August 2026, the 50% salary limb is restricted to Mumbai, Kolkata, Delhi and Chennai; all other locations use 40%. HRA exemption is ordinarily unavailable under the default new tax regime, so regime selection is a threshold eligibility question.
An employee in Indore has HRA salary of ₹5,00,000, HRA of ₹1,50,000 and rent of ₹2,10,000. The limbs are ₹1,50,000, ₹1,60,000 and ₹2,00,000. Exemption is the full ₹1,50,000 even though Indore is a 40% city because actual HRA is the lowest limb.
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HRA exemption can be claimed for eligible rented accommodation anywhere in India. The four-city list changes only the city limb from 40% to 50% of HRA salary; it does not determine basic eligibility.
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