House Rent Allowance (HRA) is an allowance given by many Indian employers, including government employers, to salaried employees in India to help them meet the cost of rent of House occupied by them on lease or rental basis.

1. House Rent Allowance
Compensation Management

2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com

3. House Rent Allowance
• House Rent Allowance
(HRA) is an allowance
given by many Indian
employers, including
government employers,
to salaried employees in
India to help them meet
the cost of rent of House
occupied by them on
lease or rental basis.

4. House Rent Allowance
• HRA is exempt from tax
under Section 10(13A) of
the Income Tax Act,
subject to certain
conditions.

5. House Rent Allowance
• House Rent Allowance
forms part of taxable
salary income of an
individual and an
employee may be
eligible to receive it, if his
employer chooses to
offer the allowance.

6. House Rent Allowance
• Thus a salaried employee
may be eligible for House
Rent Allowance (HRA)
irrespective of Whether
he/she stays in a rented/
leased accommodation
or resides in his/her own
house.

7. House Rent Allowance
• As stated earlier, House
Rent Allowance received
by a salaried employee is
exempt from tax under
Section 10(13A) of the
Income Tax Act, subject
to the following
conditions:

8. House Rent Allowance
– House Rent Allowance
(HRA) is part of the salary
package offered by the
employer to the employee
– The employee receiving
HRA stays in a
leased/rented
accommodation and pays
rent for it.
– Rent paid by the salaried
employee exceeds 10% of
his/her salary.

9. House Rent Allowance
• Rent paid by a salaried
employee to his/her
parents, for occupying a
house owned by them, is
eligible for exemption
under Indian Income Tax
Act.

10. House Rent Allowance
• However rent paid by a
salaried employee to
his/her spouse, for
occupying a house
owned by the spouse, is
not eligible for
exemption under Indian
Income Tax Act.

11. House Rent Allowance
• You must have valid
rental receipts, for
having paid the rent, in
order to claim tax
exemption on House
Rent Allowance (HRA).