Section 10(13A) has no universal rupee cap.
Section 10(13A) has no universal rupee cap. The maximum exemption for a taxpayer is the lowest of the three Rule 2A limbs, and it can never exceed the HRA actually received or the genuine rent-based amount.
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 Mumbai has HRA salary of ₹8,00,000, actual HRA of ₹3,20,000 and rent of ₹3,00,000. The three limbs are ₹3,20,000, ₹2,20,000 and ₹4,00,000. Although 50% of salary is ₹4,00,000, the actual exemption is only ₹2,20,000 because the rent limb is lower.
For the complete rules on this topic, see the core guide: HRA Exemption: Rules, Formula and Maximum Limit.
See the broader Income Tax & Salary knowledge hub for related rules and calculators on this topic.
Section 10(13A) has no universal rupee cap. The maximum exemption for a taxpayer is the lowest of the three Rule 2A limbs, and it can never exceed the HRA actually received or the genuine rent-based amount.
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