Payment: If you are staying with your parents or relatives and wish to claim HRA exemption, make sure that you do pay the rent. There should be a payment trail, so an account transfer or a cheque payment is recommended. Ownership: The property must be owned, either jointly or wholly, by the relative receiving the rent. The tax-exempt portion of HRA can be reported under the head, ‘Allowances exempt u/s 10′ in the ITR 1. From the drop down menu, select ’10 (13) – Allowance to meet expenditure incurred on house rent’. You are required to copy the tax-exempt portion of HRA from Part-B of Form-16 from the ‘Allowances exempt under section 10’ and 50% of the basic salary will be (50% of ₹24,000) = ₹12,000. Thus, the lowest of the three values is the ‘actual rent paid minus 10% of the basic salary’. Thus, Rahul is eligible to receive an exemption in HRA of ₹10,600 on the total taxable income. HRA Calculation Formula: Actual rent amount – 10% of the individual’s total salary. IZP7F6.