House rent allowance (HRA) SECTION 10(13A)
For the purposes of calculating the house rent allowance that would be exempt under rule 2A, the term ‘salary’ includes ‘dearness pay’ also— Circular : No. 90 [F. No. 275/79/72-ITJ], dated 26-6-1972. It is necessary for granting the exemption under section 10( 13A ) that the employee should have actually incurred the expenditure on rent. For purposes of deduction of tax, therefore, the disbursing officer should ensure that the employee concerned has in fact incurred the expenditure on rent. The payment of rent should be verified through rent receipts in the cases of all employees. House rent allowance paid to a person, who is living in his own house or in a house for which he does not actually pay any rent, is not exempt from tax in any circumstances— Letter : F. No. 12/19/64-IT(A-I), dated 2-1-1967. Only the expenditure actually incurred on payment of rent in respect of residential accommodation occupied by the assessee subject to the limits laid down in rule 2A, quali