House Rent Allowance (HRA) is a component of an employee's salary that is provided by the employer to cover rental expenses. It is particularly beneficial for salaried individuals living in rented accommodations, as it allows them to claim tax deductions under Section 10(13A) of the Income Tax Act, 1961. The amount of HRA received depends on several factors, including the employee's basic salary, the city of residence (metro or non-metro), and the rent paid. 

• Reduces Taxable Income - Helps salaried individuals save tax on rental expenses.
• Higher Benefit for Metro Cities - Employees in metro cities get a higher 50% deduction.
• Allows Tax Deduction Alongside Home Loan - You can claim HRA + Home Loan Tax Benefits together.
• Applicable to Salaried Employees Only - Self-employed individuals cannot claim HRA but can deduct rent under Section 80GG.

To claim an HRA tax deduction, follow these steps:

• Submit Rent Receipts & Rental Agreement: Provide monthly rent receipts and a copy of the rental agreement to your employer. 
• Landlord's PAN is Mandatory for Rent Above ₹1 Lakh Annually: If your annual rent exceeds ₹1,00,000, your employer will require the landlord's PAN.
• Declare HRA in Your ITR & Form 16: Include your HRA details in Form 16 while filing your Income Tax Return (ITR).
• Ensure Rent Payments are Made via Bank Transfer: Paying rent via cash may lead to rejection of the exemption claim.
• Avoid Fake Rent Receipts: Submitting false rent receipts can lead to tax penalties and scrutiny.

1. Can I Pay Rent to My Parents and Claim HRA?

Yes, but you must:

• Pay rent via bank transfer or cheque.
• Have a rental agreement with your parents.
• Ensure your parents declare rental income in their ITR.

2. Can I Claim HRA If I Own a House?

• If you live in your own house, you cannot claim HRA.
• However, if you own a house in a different city and live in a rented house for work, you can claim both HRA and home loan benefits.