EaseValueThere are two reliefs in the Income-tax Act for rent you pay on a home you do not own, and almost everybody who searches for one of them is actually entitled to the other. If your salary includes a house rent allowance, you claim the HRA exemption — the provision that sat at Section 10(13A) of the 1961 Act. If it does not, because you are self-employed or because your employer simply does not pay one, you claim the deduction for rent under Section 134 of the Income-tax Act, 2025 (formerly Section 80GG). They are mutually exclusive, and which one applies to you is a question of what your pay slip says, not of preference. This calculator works out the right one, computes it properly through all three of its limbs, and tells you which limb is binding — because that is the only thing that tells you whether paying more rent, or restructuring your pay, would change anything. But the arithmetic of the relief is the easy half. The half that decides the money is this: both reliefs exist only under the old regime. Claiming one means giving up the new regime's larger standard deduction under Section 19, its lower rates and its far more generous rebate under Section 156. So the honest question is never "how much rent relief can I claim" — it is whether your whole stack of old-regime deductions, of which rent relief is one line, beats the new regime. Very often it does not. On a ₹15,00,000 salary with ₹3,60,000 of rent, a perfectly valid ₹2,88,000 HRA exemption is worth nothing at all, because the new regime still wins by ₹11,596. Add ₹2,00,000 more of other deductions to the same person and the same exemption is suddenly worth ₹30,004. The relief did not change; the context did. This page computes both regimes side by side and gives you the verdict in rupees, along with the two traps that cost people most: the rent-below-10%-of-salary rule that hands a well-paid tenant in cheap accommodation nil exemption no matter how large the HRA on their pay slip, and the fact that rent paid to a parent is taxable in the parent's hands, which is the calculation almost nobody does before starting the arrangement.
How it’s calculated
- Answer the first question honestly, because it decides everything else: does your salary include a house rent allowance? If it does, you are in the HRA exemption. If it does not, you are in the Section 134 deduction. You cannot choose between them, and you cannot claim both. Look at your pay slip or Form 16 rather than relying on memory — a small HRA line you had forgotten about takes you out of Section 134 entirely.
- If you receive HRA, say whether the home you rent is in a metro. The test is where the rented accommodation is, not where your employer is registered and not where you were hired. This sets the percentage-of-salary limb to 50% or 40%, and the box remains editable.
- Enter the annual rent you actually pay. Annual, not monthly — entering a monthly figure is the single most common way to get a nonsense answer out of a rent calculator. If you share the flat and pay half, enter your half.
- Enter your total gross salary for the year, including the HRA. This is everything taxable under the salary heads, Sections 15 to 18, before any exemption and before the standard deduction under Section 19. If you are self-employed with no salary at all, leave this nil and use the other-income box instead.
- Enter your basic salary plus dearness allowance to the extent it enters retirement benefits, and separately any commission computed as a fixed percentage of turnover. This is what "salary" means for the HRA limbs, and it is a narrow definition: bonus, other allowances, perquisites and employer PF are all excluded. Putting gross salary in this box will inflate every limb and overstate your exemption, which is the error that gets claims reduced on scrutiny.
- Enter the HRA you actually received during the year. This is the first limb, and it is an absolute ceiling — you can never exempt more HRA than you were paid, however high the rent.
- Enter any other income outside salary — interest, rent received, business or professional income. If you are self-employed and claiming under Section 134, this is where your income goes.
- Enter your other old-regime deductions, excluding the rent relief. Provident fund and insurance, health insurance under Section 126, interest on deposits under Section 153, home-loan interest on a let-out property. This figure matters more than any other on the page, because the rent relief rarely carries the old regime on its own — it is the rest of the stack that decides the regime, and the relief rides on top of that decision.
- Check the limb percentages and caps. Left to right: the HRA percentage of salary, the 10% of salary subtracted from rent in the second limb, then the three Section 134 parameters — the monthly monetary cap, the percentage-of-total-income ceiling, and the percentage of total income subtracted from rent. These are inputs rather than hard-coded numbers because monetary caps get amended, and a stale figure buried in a calculator is worse than no calculator at all.
- Check the two standard deductions and the landlord PAN threshold. The standard deduction under Section 19 is larger under the new regime, and that difference is a large part of why the new regime wins so often. The PAN threshold is the annual rent above which you must report your landlord's PAN — the most common single reason an HRA claim is disallowed.
- Say whether you are paying rent to a parent or other relative. If you are, enter their other income and their age, and the page will compute the household result rather than only your side of it. Age matters because the basic exemption in the old regime rises at 60 and again at 80.
- Read the verdict row first. It names the regime you should be on and the difference in rupees. Everything below it is explanation.
- Read the relief and binding-limb rows together. The binding limb is the actionable part: if the percentage-of-salary limb binds, more rent gets you nothing; if the rent-less-10% limb binds, more rent does help; if the HRA received limb binds, only a change in your pay structure helps. Where two limbs tie, the page says so — because relaxing one alone will then change nothing.
- Read the row headed "what the rent relief is actually worth to you". This is the number the page exists for. It is not the relief, and it is not the tax on the relief — it is the difference the relief makes after the regime choice has been made properly. It is frequently nil, and where it is nil the page says so plainly rather than flattering you with a large exemption figure that buys nothing.
- Read the three coloured boxes last. The first settles whether the relief is worth choosing the old regime for, and flags the fragile case where the relief is the only thing keeping the old regime ahead. The second covers the landlord PAN, the evidence you need, and — for Section 134 — the ownership conditions that quietly disqualify people. The third computes the parent arrangement at family level.
Two reliefs, and why you do not get to choose between them
The Act does not offer a menu. It offers one relief to a person whose salary contains a house rent allowance and a different, much smaller relief to a person whose salary does not. Which of the two you are in is a matter of fact, established by your pay slip, and it is not something you can elect into because the other one looks better.
The HRA exemption is the larger of the two by an order of magnitude. It removes part of the HRA from your taxable salary altogether, and on a well-structured pay package it can run to several lakh a year. It is described on this page without an Act-2025 section number, because it does not carry one — the provision sat at Section 10(13A) of the 1961 Act and its successor is not among the numbered sections of the 2025 Act. Naming it accurately in words is better than inventing a number for the sake of tidiness, and a calculator that cites a section that does not exist is worse than one that cites none.
The Section 134 deduction (formerly Section 80GG) is the relief for everybody else — the self-employed professional, the consultant, the employee whose salary is a single consolidated figure with no allowances broken out. It is a deduction from total income rather than an exemption from salary, and it is much smaller, because it is subject to a flat monthly monetary cap that has stood at a low figure for a very long time. In practice that cap binds in the overwhelming majority of cases, which means the deduction is worth roughly the same modest amount to a person earning ₹8,00,000 and a person earning ₹80,00,000.
That asymmetry is the first thing worth understanding about your own position. If you receive HRA, the relief is potentially large and the arithmetic is worth doing carefully. If you do not, the relief is small, the cap almost certainly binds, and the practical question becomes whether it — together with everything else you claim — is enough to justify the old regime. Usually it is not on its own.
There is a structural point hiding here that is worth raising with an employer. Two people on identical total cost to company, one of whom has a properly broken-out HRA component and one of whom does not, are not in the same tax position, and the difference can run to tens of thousands of rupees a year. If your salary is a single consolidated figure and you genuinely rent, asking payroll whether the package can be restructured to include an HRA component is a legitimate and often successful conversation. It costs the employer nothing. It has to be done prospectively, though — you cannot relabel salary already paid, and a retrospective restructuring is the kind of thing that does not survive scrutiny.
One condition applies to both reliefs and is missed with some regularity: the accommodation must be one you occupy and do not own. Paying "rent" to yourself, or to an entity you control, for a property you own achieves nothing. Section 134 goes further, and its ownership conditions are covered separately below, because they disqualify a great many people who assume they qualify.
The three limbs of the HRA exemption, and the one that usually binds
The HRA exemption is the lowest of three figures, and the whole of the practical planning lies in knowing which of the three is holding you down. Calculators that print the exemption without naming the binding limb are answering half the question, because the number on its own tells you nothing about what would change it.
The first limb is the HRA you actually received. This is a hard ceiling. However much rent you pay, however expensive your city, you cannot exempt more allowance than was paid to you. If this limb binds, nothing about your housing changes the answer — only your pay structure does.
The second limb is rent paid less 10% of salary, and it is the one that binds most often. The subtraction is the part that surprises people, and it produces the single most counter-intuitive result in this area of the Act: if your rent is below 10% of your salary, your exemption is nil. Not reduced — nil. A person on ₹7,20,000 of basic pay with a ₹3,60,000 HRA line on their pay slip and ₹60,000 of annual rent gets no exemption whatsoever, because 10% of their salary is ₹72,000 and the limb comes out negative. The logic is that the relief is for rent that represents a real burden relative to pay, and rent below a tenth of salary is not treated as one. The practical consequence is that a well-paid person living cheaply — sharing a flat, living in a small town, staying somewhere subsidised — gets nothing, and is frequently astonished by it.
The third limb is a percentage of salary: 50% where the rented home is in a metro, 40% elsewhere. Note carefully what the test is. It is where the house you rent is situated, not where your employer is registered, not where you were hired, and not where your Form 16 was generated. Someone employed by a Mumbai head office but renting in a small town gets 40%, and someone employed by a small-town firm but renting in a metro gets 50%.
The word salary in the second and third limbs is narrow and is the source of most incorrect claims. It means basic pay, plus dearness allowance to the extent it enters retirement benefits, plus commission computed as a fixed percentage of turnover — and nothing else. Your bonus is not salary for this purpose. Neither are your other allowances, your perquisites, or your employer's provident fund contribution. Using gross salary in these limbs inflates the 50% limb and inflates the 10% subtraction at the same time, and the net effect is almost always an overstated exemption that gets reduced on scrutiny with interest running from the original due dates.
Knowing the binding limb converts the calculation into advice. If the rent-less-10% limb binds, additional rent increases your exemption rupee for rupee, so a move to a more expensive flat has a real tax offset. If the percentage-of-salary limb binds, additional rent buys you nothing at all and you are paying it out of fully taxed income. If the HRA received limb binds, you are leaving relief on the table that only a payroll conversation can recover. This calculator names the limb, and where two of them land on the same figure it says so — because in that case relaxing one alone will change nothing.
Section 134: the relief for everybody without an HRA
Where no house rent allowance is received at any time during the year, Section 134 of the Income-tax Act, 2025 allows a deduction for rent paid. It replaces Section 80GG of the 1961 Act and works on the same three-limb structure, but with different and much tighter parameters.
The deduction is the lowest of: a flat monthly monetary cap, expressed as a fixed sum per month; a percentage of total income; and rent paid less a percentage of total income. On the parameters currently in force, the monthly cap binds in the great majority of real cases, which is why the deduction is a modest one rather than a substantial one. All three parameters are exposed as editable inputs on this page, precisely because a fixed monetary cap is the kind of figure that gets amended and then sits stale in calculators for years afterwards.
"Total income" for these limbs means your total income computed before allowing this deduction, after the standard deduction under Section 19 and after every other deduction you are claiming. The calculator shows that figure explicitly so you can see what the percentage limbs are running on, rather than having to trust an unstated intermediate number.
The conditions are stricter than most people expect, and two of them disqualify a great many claimants who never realise it. The first is that no house rent allowance may be received by you at any time during the year — receiving even a small HRA for part of the year takes you out of Section 134 entirely and into the HRA exemption instead. The second is the ownership test: the deduction is unavailable if you, your spouse, your minor child, or a Hindu undivided family of which you are a member owns residential accommodation at the place where you ordinarily reside or carry on your business or profession, and it is equally unavailable if you own a house anywhere that you have claimed as self-occupied.
That second condition catches people who feel very hard done by, and the fact pattern is common. Someone owns a small flat in the city they work in — bought years ago, let out or occupied by a relative — and genuinely rents somewhere else because the owned flat is too small, too far, or occupied. They are paying real rent out of taxed income and they are nonetheless disqualified. There is no relief available on those facts, and it is much better to know that before filing than to claim and have it reversed.
A declaration in Form 10BA is required, and it is a declaration about precisely those conditions rather than an administrative formality. Signing it while owning a flat at your place of work is not a paperwork slip. Beyond the form, keep the ordinary evidence: a written rent agreement, receipts, and payment by bank transfer. A claim supported by nothing but self-generated receipts is the classic disallowance, and where a claim is reversed, interest under Sections 424 and 425 runs on the resulting demand from the original due dates — so a claim struck down two years later costs materially more than the tax it originally saved.
The question that actually decides the money: is the relief worth the old regime?
This is the part that ordinary rent calculators leave out, and it is the part that determines whether any of the arithmetic above matters. Both reliefs are available only under the old regime. Claiming either means declining the new regime, and the new regime is not a small thing to decline: it carries a larger standard deduction under Section 19, materially lower rates through the middle bands, and a rebate under Section 156 that takes a substantial band of income to nil tax.
So the relief is never worth its face value. It is worth the difference it makes after the regime decision has been taken properly, and that is frequently nil. Consider a salaried person on ₹15,00,000 gross with ₹7,20,000 of basic pay, a ₹3,60,000 HRA and ₹3,60,000 of annual metro rent, claiming ₹2,00,000 of other old-regime deductions. Their HRA exemption is ₹2,88,000 — correctly computed, fully supportable, entirely genuine. Their old-regime tax is ₹1,09,096. Their new-regime tax is ₹97,500. The new regime wins by ₹11,596, so the ₹2,88,000 exemption is worth exactly nothing in cash. Claiming it and staying on the old regime does not save them money; it costs them ₹11,596.
Now change one input on that same taxpayer. Raise the other deductions from ₹2,00,000 to ₹4,00,000 — a larger provident fund, a home loan on a let-out property, a bigger insurance premium — and the old regime falls to ₹67,496. It now beats the new regime's unchanged ₹97,500, and the identical ₹2,88,000 exemption is suddenly worth ₹30,004. Nothing about the rent, the salary or the exemption changed. What changed was the rest of the deduction stack, and that is the honest lesson: rent relief is one line in a stack, and the stack decides the regime, not the line.
There is a fragile case worth naming separately, and this calculator flags it in red when it arises. Sometimes the old regime wins, but only because of the rent relief — strip the relief out and the new regime would have been better. That taxpayer has made an election that depends entirely on a claim surviving. If the landlord will not give a PAN, or the rent agreement turns out to be undocumented, or the payments were in cash, the claim goes and the election has already been made. They end up worse off than if they had simply taken the new regime and never thought about the rent. The rule follows directly: where the relief is the only thing carrying the old regime, get the paperwork complete before making the election, not after.
A related point about the Section 134 case. Because the monthly monetary cap is low, a Section 134 deduction on its own almost never flips the regime for anyone. A self-employed person on ₹12,00,000 of income claiming the maximum Section 134 deduction and ₹1,50,000 of other deductions has an old-regime bill of ₹1,14,920 against a new-regime bill of nil, because their total income sits within the Section 156 rebate threshold. The deduction is real, correctly computed and completely worthless to them. Being told that plainly is more useful than being congratulated on a deduction that buys nothing.
One caution about the mechanics of switching. The freedom to move between regimes is not identical for everyone — the position differs between a person with only salary income and a person with business or professional income, where the ability to switch back is restricted. Treat the regime as a decision taken with advice rather than a toggle flipped annually on instinct, and use the figures on this page to see the size of what is at stake before taking that advice.
Paying rent to a parent: legitimate, useful, and routinely mis-assessed
There is no rule against renting from a relative, and paying rent to a parent who owns the property you live in is a perfectly ordinary arrangement. It is also one of the most consistently mis-assessed, for a simple reason: people compute their own tax saving and stop there. The rent does not vanish. It is taxable income in the recipient's hands, and the arrangement is worth doing only if the household as a whole is better off.
On the parent's side, the rent is taxed under the house-property head. The annual value is reduced by any municipal taxes they actually pay, and then by the 30% standard deduction under Section 22 — so roughly 70% of the rent enters their taxable income. That 30% is a genuine and automatic allowance, not an election, and it is what gives the arrangement much of its efficiency: ₹6,00,000 of rent adds only about ₹4,20,000 to the parent's income before their own exemptions and deductions are applied.
The economics turn almost entirely on the parent's existing income and age. A retired parent with a modest pension and little else is the ideal recipient: their basic exemption in the old regime is higher from 60 and higher again from 80, and under the new regime the Section 156 rebate covers a substantial band of total income, so a large rent can frequently land at very little tax or none at all. On a worked case — ₹6,00,000 of annual rent to a parent aged 65 with ₹3,00,000 of pension — the rent adds ₹4,20,000 to their income, taking them to ₹7,20,000, on which their tax remains nil because that figure sits within the rebate threshold under the new regime. The child saves ₹24,960 and the household keeps all of it.
Reverse the facts and the arrangement destroys value. A parent already in the 30% band from other rents and interest income will hand back more than the child saved, because the rent has moved from a bracket into an equal or higher one and has picked up compliance obligations on the way. This calculator computes both sides and reports the family-level net, in rupees, including the case where that figure is negative. A tool that tells you not to do something is worth more than one that always says yes.
Whatever the arithmetic says, the arrangement only holds if it is real. Your parent must actually own the property. There must be a genuine rent agreement on ordinary commercial terms. The money must move by bank transfer, monthly, and stay moved — a standing instruction that is reversed the following week is not rent. And your parent must declare the rent in their own return. Rent paid to a parent who does not report it is the fact pattern that gets these claims disallowed, and the important asymmetry is that the disallowance lands on the person who claimed the exemption, not on the person who received the money.
Two further practical points. Where the annual rent exceeds the reporting threshold, you need the parent's PAN just as you would any other landlord's — being family is not an exemption from the requirement. And if the property is jointly owned by both parents, the rent should be split between them in the ownership proportion and reported by each, which frequently improves the household position further by using two sets of exemptions instead of one. The family-level figure this calculator reports is deliberately conservative: it ignores the municipal taxes the parent pays and the standard deduction on their pension, both of which would reduce their tax further. The real household position is therefore this good or better, never worse.
Evidence, disallowance, and what this calculator does not model
Rent relief is one of the most frequently examined claims in a salaried return, for the straightforward reason that it is easy to assert and historically was easy to fabricate. The evidence expected is not onerous, but it does have to exist before the claim rather than after the query.
The landlord's PAN is the pinch point. Above a threshold of annual rent, the HRA exemption is claimable only if you provide the landlord's name, address and PAN to your employer and, on examination, to the department. If the landlord will not give it, the claim is liable to be disallowed in full. That refusal is itself informative: a landlord who will not give a PAN is usually one who is not declaring the rent, which means your claim rests on documentation that will not survive contact with an assessing officer. Ask at the point of signing the lease, when you have leverage and no immediate need, rather than in January when the payroll deadline has arrived.
Beyond the PAN, keep a written rent agreement, keep receipts, and — most important of all — pay by bank transfer. Cash rent supported by self-written receipts is the single most common disallowance pattern in this area. Where a claim is reversed, the cost is not merely the tax: interest under Sections 424 and 425 runs on the demand from the original due dates, so a claim struck down two or three years later costs appreciably more than it ever saved.
What this calculator does not model, stated plainly rather than silently ignored. It computes on annual figures and assumes a full year of both rent and HRA. If you moved mid-year, changed city, started or stopped renting, or your HRA changed part-way through, the exemption has to be worked out month by month or period by period and the lowest-of-three test applied to each period separately. Doing it on annual totals in that situation will give a different — and generally larger, therefore riskier — answer than doing it correctly. It also does not model accommodation provided by the employer, which is a perquisite valuation question rather than a rent relief one; the position of a non-resident; part-year commission on turnover; or any income taxed at special rates such as capital gains, which sit outside the ordinary slab computation this page performs.
On the regime comparison, the tax on both sides is computed for a resident individual below 60, with the rebate under Section 156, the full surcharge ladder and surcharge marginal relief. Salary and rent relief are ordinary income, so the 15% surcharge cap that applies to capital gains and dividends has no application here — assuming otherwise understates the tax on a large package materially. In the family-level box, the parent's tax is computed under both regimes and the better one taken, using the age-appropriate basic exemption.
On section numbering, the discipline applied throughout is to cite only what can be verified. Section 134 for the rent deduction where no HRA is received, Section 19 for the standard deduction from salary, Sections 15 to 18 for the salary heads, Section 22 for the 30% house-property allowance, Section 126 for health insurance, Section 153 for interest on deposits, Section 156 for the rebate, and Sections 424 and 425 for interest. The HRA exemption itself carries no Act-2025 section number and is therefore described in words, with its 1961 Act provenance noted. Treat the output as a well-informed basis for a conversation, and treat the regime verdict as the part worth acting on first — it is remade every year, it costs nothing to get right, and it is routinely worth more than the relief the page was opened to compute.
Frequently asked questions
Can I claim both the HRA exemption and the Section 134 deduction?
No — they are mutually exclusive, and which one applies is a matter of fact rather than choice. If your salary includes a house rent allowance you claim the HRA exemption (formerly Section 10(13A)). If it does not, you claim the deduction under Section 134 of the Income-tax Act, 2025 (formerly Section 80GG). Section 134 is expressly unavailable where any HRA is received at any time during the year, so even a small HRA for part of the year takes you out of it. Check your pay slip rather than relying on memory. The two are very different in size: the HRA exemption can run to several lakh, while Section 134 is held down by a low flat monthly monetary cap that binds in most real cases.
My rent is low compared to my salary. Why is my exemption nil?
Because the second limb of the HRA exemption is rent paid less 10% of salary, and if your rent is below 10% of salary that limb comes out negative — so the lowest of the three limbs is nil. Not reduced: nil. Someone with ₹7,20,000 of basic pay and a ₹3,60,000 HRA line on their pay slip who pays ₹60,000 of annual rent gets no exemption at all, because 10% of their salary is ₹72,000. They would need annual rent above ₹72,000 — around ₹6,000 a month — before a single rupee becomes exempt. The relief is designed for rent that is a real burden relative to pay, and the Act does not treat rent below a tenth of salary as one. This surprises well-paid people who share flats or live somewhere cheap, and no amount of HRA on the pay slip changes it.
What counts as "salary" for the HRA limbs?
Something much narrower than your gross pay, and this is where most incorrect claims come from. It means basic pay, plus dearness allowance to the extent it forms part of retirement benefits, plus commission computed as a fixed percentage of turnover — and nothing else. Your bonus is excluded. So are your other allowances, your taxable perquisites and your employer's provident fund contribution. Using gross salary instead inflates the 50%-or-40% limb and inflates the 10% subtraction simultaneously, and the net result is almost always an overstated exemption. If that is reduced on scrutiny, interest under Sections 424 and 425 runs on the demand from the original due dates, so the eventual cost exceeds the tax originally saved.
Is the metro test about where I work or where I live?
Where you live — specifically, where the rented accommodation is situated. It is not where your employer is registered, not where you were hired, and not where your Form 16 was generated. Someone employed by a Mumbai head office but renting in a small town takes the non-metro percentage; someone employed by a small-town firm but renting in a metro takes the metro percentage. The distinction changes only the third limb, so it matters when that limb is the binding one and is irrelevant when it is not — which is precisely why this calculator names the binding limb rather than just printing a number.
I get a large HRA. Does that mean the old regime is better for me?
Not on its own, and this is the mistake the page exists to correct. Both rent reliefs are old-regime only, so claiming one means giving up the new regime's larger standard deduction under Section 19, its lower rates and its more generous rebate under Section 156. A perfectly valid exemption can therefore be worth nothing in cash. On a ₹15,00,000 salary with ₹3,60,000 of metro rent and ₹2,00,000 of other deductions, a correctly computed ₹2,88,000 HRA exemption still leaves the old regime at ₹1,09,096 against ₹97,500 under the new regime — so claiming it costs ₹11,596. Add ₹2,00,000 more of other deductions to the same person and the same exemption becomes worth ₹30,004. The relief did not change; the rest of the stack did. Rent relief is one line in a deduction stack, and the stack decides the regime.
Do I need my landlord's PAN?
Above a threshold of annual rent, yes — the HRA exemption is claimable only if you give your employer, and on examination the department, the landlord's name, address and PAN. Below it you do not, but you still need a rent agreement, receipts and proof the money left your account. A landlord who refuses the PAN is usually one who is not declaring the rent, and that refusal tells you your claim rests on documentation that will not survive scrutiny. Ask when you sign the lease, not in January. This matters most in the fragile case this calculator flags in red: where the rent relief is the only reason the old regime is ahead. There, a disallowed claim leaves you having already elected the old regime and then lost the deduction you elected it for — worse off than if you had simply taken the new regime.
Can I pay rent to my parents and claim HRA?
Yes, and it is entirely legitimate — but you must compute it at household level, which almost nobody does. The rent is taxable income in your parent's hands under the house-property head, taxed on the annual value after the 30% standard deduction under Section 22, so roughly 70% of it enters their income. Whether the family gains depends almost entirely on the parent's existing income and age, since the old-regime basic exemption rises at 60 and again at 80 and the Section 156 rebate covers a wide band under the new regime. On a worked case, ₹6,00,000 of rent to a parent aged 65 with a ₹3,00,000 pension adds ₹4,20,000 to their income, taking them to ₹7,20,000 — on which their tax remains nil — while the child saves ₹24,960, so the household keeps all of it. Reverse the facts, with a parent already in the 30% band, and the household loses money. Conditions: the parent must actually own the property, there must be a real rent agreement, the money must move by bank transfer, and the parent must declare the rent. An undeclared rent is what gets these claims struck down, and the demand lands on you, not on them.
I own a flat in the city where I work but I rent somewhere else. Can I claim Section 134?
No. The deduction is unavailable if you, your spouse, your minor child, or a Hindu undivided family of which you are a member owns residential accommodation at the place where you ordinarily reside or carry on your business or profession — and equally unavailable if you own a house anywhere that you have claimed as self-occupied. This disqualifies a lot of people who feel hard done by, and the fact pattern is common: a small flat bought years ago, let out or occupied by a relative, while you genuinely rent somewhere larger and pay for it out of taxed income. There is no relief available on those facts. A declaration in Form 10BA is required for the deduction, and it is a declaration about exactly these conditions, not an administrative formality — signing it while owning a flat at your place of work is not a paperwork slip. Note that the HRA exemption has no equivalent ownership bar, so a salaried person with an HRA in the same situation is generally fine.
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