Yes. Paying rent to a parent qualifies for HRA exemption under Section 10(13A), provided your parent actually owns the property, the rent is genuinely paid (ideally by bank transfer), and your parent declares that rent as house-property income. You cannot claim it for a home you own yourself, and HRA exemption exists only under the old regime.

The four conditions

The exemption is not a loophole — it is the ordinary operation of Section 10(13A), and it survives scrutiny when four things are true. First, the property must be owned by the parent you pay, not by you. Second, the rent must actually move: a monthly bank transfer is far stronger evidence than cash. Third, your parent must report that rent as income from house property in their own return (they are allowed a 30% standard deduction against it under Section 24(a)). Fourth, you must not be the owner or co-owner of the home you are claiming rent on.

What gets these claims disallowed in practice is not the arrangement itself but the paperwork: no rent agreement, round-sum cash "payments" with no trail, or a parent who never declared the income. Treat it exactly as you would a claim against an unrelated landlord.

The proof to keep

Keep a written rent agreement between you and your parent, monthly bank transfers referencing rent, and rent receipts. If your annual rent exceeds ₹1,00,000 you must report your landlord's PAN to your employer — your parent's PAN, in this case. Keep your parent's filed return as well, since it is the single document that shows the other side of the transaction was declared.

How much is actually exempt

The exemption is the LEAST of three figures, not whichever one you prefer: the HRA you actually receive, your rent minus 10% of your basic salary plus DA, and 50% of basic+DA for the four classic metros (Delhi, Mumbai, Kolkata, Chennai) or 40% everywhere else. That last split catches people out — for HRA purposes Bengaluru, Pune and Hyderabad are 40% cities, not 50%.

Take basic+DA of ₹50,000 a month with HRA of ₹25,000 and rent of ₹20,000, outside the four metros. The three limbs are ₹25,000, ₹15,000 and ₹20,000, so ₹15,000 a month is exempt — ₹1,80,000 across the year — and the remaining ₹10,000 a month is taxable. Raise the rent to ₹30,000 and the limbs become ₹25,000, ₹25,000 and ₹20,000, so the 40% cap now binds and ₹20,000 a month is exempt. In the same case in a metro, the 50% limb rises to ₹25,000 and the full ₹25,000 becomes exempt.

The direction of the maths is worth noticing: because one limb is rent minus 10% of salary, a rent below 10% of your basic+DA produces an exemption of exactly zero, no matter how large your HRA component is.

Exempt = min(HRA received, rent − 10% of (basic+DA), 50%/40% of (basic+DA))

Only under the old regime

Under the new regime, HRA exemption is not available at all. So this question only changes your tax if you are on the old regime, or deciding between the two. Run both on your own numbers before assuming the exemption is worth having — for many salaries in FY 2025-26 the new regime still wins even after HRA is counted, and for others it does not.

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