{"id":32707,"date":"2026-08-08T00:24:03","date_gmt":"2026-08-07T18:54:03","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=32707"},"modified":"2026-08-08T00:34:39","modified_gmt":"2026-08-07T19:04:39","slug":"hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/","title":{"rendered":"HRA Exemption under Old Tax Regime: New Rule w.e.f. 1.4.2026"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a764a4f8970b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a764a4f8970b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#HRA_Exemption_under_Old_Tax_Regime_New_Rules_Effective_from_1_April_2026\" title=\"HRA Exemption under Old Tax Regime: New Rules Effective from 1 April 2026\">HRA Exemption under Old Tax Regime: New Rules Effective from 1 April 2026<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Salaried_Employees_HRA_New_Rules_Effective_from_1_April_2026\" title=\"Salaried Employees &amp; HRA: New Rules Effective from 1 April 2026\">Salaried Employees &amp; HRA: New Rules Effective from 1 April 2026<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Key_Changes_in_HRA_Rules_from_1_April_2026\" title=\"Key Changes in HRA Rules from 1 April 2026\">Key Changes in HRA Rules from 1 April 2026<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Expansion_of_Metro_Cities_for_Higher_HRA_Exemption\" title=\"Expansion of Metro Cities for Higher HRA Exemption\">Expansion of Metro Cities for Higher HRA Exemption<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#New_Compliance_Form\" title=\"New Compliance Form\u00a0\">New Compliance Form\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Mandatory_Landlord_Relationship_Disclosure\" title=\"Mandatory Landlord Relationship Disclosure\">Mandatory Landlord Relationship Disclosure<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Additional_Information_Required_for_Higher_Rent_Claims\" title=\"Additional Information Required for Higher Rent Claims:\u00a0\">Additional Information Required for Higher Rent Claims:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Technology-Based_Verification\" title=\"Technology-Based Verification\u00a0\">Technology-Based Verification\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Impact_of_House_Rent_Allowance_on_Salaried_Employees\" title=\"Impact of House Rent Allowance on Salaried Employees\u00a0\">Impact of House Rent Allowance on Salaried Employees\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Key_Takeaway_of_House_Rent_Allowance_change\" title=\"Key Takeaway of House Rent Allowance change\u00a0\">Key Takeaway of House Rent Allowance change\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#HRA_Exemption_Allowed_Even_if_Employer_Pays_Rent_Directly_to_Landlord\" title=\"HRA Exemption Allowed Even if Employer Pays Rent Directly to Landlord\">HRA Exemption Allowed Even if Employer Pays Rent Directly to Landlord<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Practical_Implications_for_Salaried_Employees\" title=\"Practical Implications for Salaried Employees\">Practical Implications for Salaried Employees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/hra-exemption-under-old-tax-regime-new-rule-w-e-f-1-4-2026\/#Why_This_Ruling_is_Important\" title=\"Why This Ruling is Important\">Why This Ruling is Important<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-32708\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/HRA-.png\" alt=\"HRA: New Rules Effective from 1 April 2026\" width=\"721\" height=\"861\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/HRA-.png 432w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/HRA--251x300.png 251w\" sizes=\"(max-width: 721px) 100vw, 721px\" \/><\/p>\n<div>\n<h2><span class=\"ez-toc-section\" id=\"HRA_Exemption_under_Old_Tax_Regime_New_Rules_Effective_from_1_April_2026\"><\/span><span style=\"color: #000080;\">HRA Exemption under Old Tax Regime: New Rules Effective from 1 April 2026<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Salaried_Employees_HRA_New_Rules_Effective_from_1_April_2026\"><\/span><span style=\"color: #000080;\">Salaried Employees &amp; HRA: New Rules Effective from 1 April 2026<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The new House Rent Allowance framework, effective from 1 April 2026, introduces important changes for salaried employees claiming HRA exemption under the old tax regime. The revised provisions are aimed at enhancing transparency, improving verification mechanisms, and reducing false House Rent Allowance claims through increased data matching and disclosure requirements.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Key_Changes_in_HRA_Rules_from_1_April_2026\"><\/span><span style=\"color: #000080;\">Key Changes in HRA Rules from 1 April 2026<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Expansion_of_Metro_Cities_for_Higher_HRA_Exemption\"><\/span><span style=\"color: #000080;\">Expansion of Metro Cities for Higher HRA Exemption<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong><span style=\"color: #000080;\">Up to 31 March 2026<\/span> : <\/strong>50% HRA benefit was available only for\u00a0Delhi,\u00a0Mumbai,\u00a0Kolkata and\u00a0Chennai<\/p>\n<p><span style=\"color: #000080;\"><strong>From 1 April 2026\u00a0\u00a0<\/strong><\/span><\/p>\n<ul>\n<li>Additional cities have been included\u00a0Bengaluru,\u00a0Hyderabad,Pune and Ahmedabad<\/li>\n<li>This increases the number of cities eligible for the 50% salary-based House Rent Allowance exemption calculation from 4 to 8.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"New_Compliance_Form\"><\/span><span style=\"color: #000080;\">New Compliance Form\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>Earlier:<\/strong> Form 12BB\u00a0<\/span><\/p>\n<p><span style=\"color: #000080;\"><strong>Now:<\/strong> Form 124<\/span><\/p>\n<p>Employees claiming House Rent Allowance benefits may be required to furnish details in the revised compliance form prescribed under the new rules.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mandatory_Landlord_Relationship_Disclosure\"><\/span><span style=\"color: #000080;\">Mandatory Landlord Relationship Disclosure<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong><span style=\"color: #000080;\">Earlier:<\/span> <\/strong>Disclosure of a relationship with the landlord was generally not mandatory.<\/p>\n<p><span style=\"color: #000080;\"><strong>From 1 April 2026<\/strong><\/span><\/p>\n<ul>\n<li>Employees must disclose the relationship with the landlord where applicable.\u00a0This is particularly relevant where rent is paid to\u00a0Parents,\u00a0Spouse and\u00a0Other relatives<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Additional_Information_Required_for_Higher_Rent_Claims\"><\/span><span style=\"color: #000080;\">Additional Information Required for Higher Rent Claims:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For rent exceeding prescribed limits:<\/p>\n<p><span style=\"color: #000080;\"><strong>Earlier, <\/strong><\/span>the permanent account number\u00a0of the landlord was generally required.<\/p>\n<p>Now, the Permanent Account Number\u00a0of the landlord continues to be required. and relationship disclosure with the landlord is also mandatory.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Technology-Based_Verification\"><\/span><span style=\"color: #000080;\">Technology-Based Verification\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong><span style=\"color: #000080;\">Earlier, House Rent Allowance<\/span> <\/strong>verification largely relied on Rent receipts, rent agreements, and Supporting documents<\/p>\n<p><span style=\"color: #000080;\"><strong>From 1 April 2026: <\/strong><\/span>Greater use of the Annual Information Statement, data analytics, cross-verification mechanisms, and digital matching of taxpayer information. This means HRA claims may be subject to increased scrutiny and automated verification.<\/p>\n<p>Important Note: House Rent Allowance exemption continues to be available only under the Old Tax Regime.<\/p>\n<p>Employees opting for the new tax regime\u00a0cannot claim the house rent allowance exemption.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Impact_of_House_Rent_Allowance_on_Salaried_Employees\"><\/span><span style=\"color: #000080;\">Impact of House Rent Allowance on Salaried Employees\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The revised house rent allowance rules are intended to Strengthen compliance and reporting accuracy. Reduce mismatched or fictitious rent claims. Promote transparency in rent transactions, Improve tax administration through technology-driven verification and ensure genuine taxpayers continue to receive legitimate House Rent Allowance benefits.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Key_Takeaway_of_House_Rent_Allowance_change\"><\/span><span style=\"color: #000080;\">Key Takeaway of House Rent Allowance change\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Salaried taxpayers claiming House Rent Allowance should maintain proper rent documentation, ensure accurate landlord details are reported, and verify that\u00a0Permanent Account Number, Aadhaar, and income tax records are consistent. With enhanced reporting and data-driven verification mechanisms, maintaining complete and accurate records will become more important than ever.<\/p>\n<div>\n<h2><span class=\"ez-toc-section\" id=\"HRA_Exemption_Allowed_Even_if_Employer_Pays_Rent_Directly_to_Landlord\"><\/span><span style=\"color: #000080;\">HRA Exemption Allowed Even if Employer Pays Rent Directly to Landlord<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32710\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/HRA-.-.png\" alt=\"HRA Exemption Allowed Even if Employer Pays Rent Directly to Landlord\" width=\"680\" height=\"558\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/HRA-.-.png 680w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/HRA-.--300x246.png 300w\" sizes=\"(max-width: 680px) 100vw, 680px\" \/><\/p>\n<p>A significant ruling by the Gujarat High Court in the case of <em>Kuldeepkumar D. Kaura vs. DCIT<\/em> has provided important relief to salaried employees claiming House Rent Allowance exemption u\/s 10(13A). Key Ruling on House Rent Allowance<\/p>\n<ul>\n<li>House rent allowance exemption cannot be denied merely because the employer directly pays the rent to the landlord and subsequently recovers the same amount from the employee&#8217;s salary.<\/li>\n<li>What is relevant for claiming a house rent allowance\u00a0exemption is that the employee ultimately bears the rental expense.<\/li>\n<li>The method of payment, whether rent is paid directly by the employee or through an employer-facilitated arrangement, does not affect the employee&#8217;s eligibility for a house rent allowance\u00a0exemption.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Practical_Implications_for_Salaried_Employees\"><\/span><span style=\"color: #000080;\">Practical Implications for Salaried Employees<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-32715\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Screenshot-2026-08-08-003048-1.png\" alt=\"HRA 2-26\" width=\"809\" height=\"1037\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Screenshot-2026-08-08-003048-1.png 284w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Screenshot-2026-08-08-003048-1-234x300.png 234w\" sizes=\"(max-width: 809px) 100vw, 809px\" \/><\/p>\n<p>Many organizations provide leased accommodation arrangements where:<\/p>\n<ul>\n<li>The employer enters into a lease agreement with the landlord.<\/li>\n<li>Rent is paid directly by the employer to the landlord.<\/li>\n<li>The corresponding amount is recovered from the employee&#8217;s salary.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>In such cases, employees may still be eligible for a house rent allowance exemption, provided the following:<\/strong><\/span><\/p>\n<ul>\n<li>The rental expenditure is effectively borne by the employee.<\/li>\n<li>Appropriate documentation is maintained.<\/li>\n<li>Other conditions prescribed u\/s 10(13A) &amp; Rule 2A are satisfied.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Why_This_Ruling_is_Important\"><\/span><span style=\"color: #000080;\">Why This Ruling is Important<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Clarifies the treatment of employer-facilitated lease arrangements.<\/li>\n<li>Reinforces the principle that the substance of the transaction is more important than the payment mechanism.<\/li>\n<li>Provides support for genuine house rent allowance\u00a0claims where rent is recovered from salary.<\/li>\n<li>Reduces the risk of unjustified denial of HRA exemption solely on technical grounds.<\/li>\n<li>The following are key takeaways: For house rent allowance exemption purposes, the critical factor is who ultimately bears the rent cost, not who physically remits the rent to the landlord. Where the employee bears the rental burden through salary recovery or reimbursement arrangements, a house rent allowance\u00a0exemption may still be available subject to fulfillment of other statutory requirements.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>HRA Exemption under Old Tax Regime: New Rules Effective from 1 April 2026 Salaried Employees &amp; HRA: New Rules Effective from 1 April 2026 The new House Rent Allowance framework, effective from 1 April 2026, introduces important changes for salaried employees claiming HRA exemption under the old tax regime. The revised provisions are aimed at &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[10518],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32707"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=32707"}],"version-history":[{"count":3,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32707\/revisions"}],"predecessor-version":[{"id":32713,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32707\/revisions\/32713"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=32707"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=32707"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=32707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}