Circular No. 2/2020 — HRA exemption — calculation method
Date: 2020-01-03 Status: ACTIVE Category: Exemptions Binding on Department: Yes (Section 119 / Section 400 IT Act 2025)
Summary
Method of calculation of HRA exemption under section 10(13A). Metro vs non-metro distinction.
Key Directions
- Exemption: minimum of actual HRA, rent minus 10% salary, or 50%/40% salary.
- 50% for metro cities (Delhi, Mumbai, Kolkata, Chennai); 40% others.
- Salary: basic + DA (if part of retirement benefits).
Applicability Under IT Act 2025
Saving Clause: Section 536 of IT Act 2025 saves circulars issued under the 1961 Act “so far as not inconsistent” with the new Act.
| Old Section (1961 Act) | New Section (2025 Act) | Consistent? |
|---|---|---|
| 10(13A) | 19 | Yes |
Cross-References
Act Sections
- Section 10(13A)
- Section 19
Related Circulars
- None identified
Key Case Law (Circular Supremacy)
- To be populated — cases where this circular was cited/applied
Full Text
Full text to be added — see raw/circulars/ for PDF when available
Source
- Official: incometaxindia.gov.in/circulars