The amount exempted would be the least of the 3: i) The actual HRA printed on your pay slip, or ii) 40/50% of your basic salary + dearness allowance, or iii) The rent amount minus 10% of basic salary + dearness allowance.
(Dearness allowance is generally paid mainly in government/public sector organisations and is very uncommon in private sector.)
The amount of actual HRA would be as per the pay structure and could be more or less than 50% of the salary. However, in many companies salary is so structured that HRA is 50% (if the company is based in the Metros; else 40%) of the basic salary.
HOME LOAN AND HRA : If you took a home loan to buy a house in Mumbai, but you reside in say Bangalore for some reason, you can get tax benefits on your housing loan. Suppose you have bought a house in the same city but are staying in a rental accommodation because the house is not ready for possession, you will be entitled to the tax benefits.
You can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on your home is complete for possession, the HRA benefit stop tax experts say.
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Source:http://economictimes.indiatimes.com/
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