What is HRA (House Rent Allowance)?
House rent allowance (HRA) is a part of salary an employer pays to help an employee meet rent. Under the Code on Wages, 2019 it sits among the payments outside the base definition of wages, subject to the 50% add-back rule. Whether any part is tax-free depends on the tax regime you choose.
Example
A salary of Rs 60,000 a month shows basic pay of Rs 30,000 and HRA of Rs 12,000. For payroll, HRA is a fixed allowance; for tax, the Income Tax Department's current rules decide how much, if any, is exempt.
Check the tax side
Use the Income Tax Department's guidance for your regime; see TDS and Form 16.
Related terms and guides
Sources
- The Code on Wages, 2019, https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf, live official page, linked for readers; link checked 2026-10-31
- Income Tax Department, Government of India, https://www.incometax.gov.in, live official page, linked for readers; link checked 2026-10-31
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.