A rent receipt helps document rent actually paid. It does not, by itself, establish an HRA exemption or guarantee employer acceptance. For tax year 2026–27, first check the applicable tax regime, then assemble the rental and payroll evidence for the correct period.
Use the rules for the income period
This guide discusses tax year 2026–27 under the Income-tax Act, 2025 and Income-tax Rules, 2026, reviewed on 2 October 2026. Do not apply its updated form references and city list to an earlier period. A return for FY 2025–26 / AY 2026–27 belongs to the earlier framework even if you file it during 2026.
HRA exemption is unavailable under the default new tax regime in section 202. The relevant exemption in Schedule III, Table serial number 11 is among its exclusions. An eligible person using the old regime must still satisfy the HRA conditions; merely selecting that regime or receiving an allowance is not enough.
Calculate only for a qualifying rental period
For eligible HRA under the 2026 rules, the exemption is the least of actual HRA received, rent actually paid minus 10% of the relevant salary, and the applicable salary percentage. The percentage is 50% for accommodation in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad or Bengaluru, and 40% elsewhere.
Use the rule’s salary definition, not annual CTC or every payslip allowance. It includes basic salary and qualifying dearness allowance and turnover-based commission under the relevant employment terms. Recalculate for periods when salary, rent, accommodation or HRA changes rather than mixing incompatible annual figures.
| Comparison | Calculation | Amount |
|---|---|---|
| Actual HRA | Received for the month | ₹12,000 |
| Rent less 10% of qualifying salary | ₹18,000 − (10% × ₹30,000) | ₹15,000 |
| Applicable salary percentage | 50% × ₹30,000 | ₹15,000 |
| Illustrative exempt HRA | Least of ₹12,000, ₹15,000 and ₹15,000 | ₹12,000 |
The qualifying salary in this example is ₹30,000 basic with no additional qualifying DA or commission. It is not the ₹50,000 gross amount in the separate payslip example. The calculation does not apply under the default new regime.
Prepare Form 124 and the rental evidence
Under the 2026 rules, Form 124 replaces the earlier Form 12BB for employee claims considered by the employer when computing salary TDS. It identifies the employee and tax year, then records landlord details, any relationship with the landlord and rent paid. A copy of the house rent agreement is an annexure for an HRA claim. Submit the form and evidence to the employer through its accepted electronic or physical process.
| Evidence | What it establishes | Check |
|---|---|---|
| Rental agreement | Parties, premises and agreed rental terms | Correct property and covered period |
| Rent receipts | Landlord’s acknowledgement of rent received | Tenant, landlord, period, date and amount agree |
| Payment evidence | Transfer or other support for payment | Match payment dates and references to the receipts |
| Payroll details | HRA received and relevant salary | Use the same period as the rental calculation |
| Form 124 | Employee’s claim and declaration to the employer | Complete the applicable information and annexures |
Landlord PAN and acknowledgement
Form 124 requires the landlord’s PAN when aggregate rent paid during the tax year exceeds ₹1,00,000. For example, ₹18,000 for twelve months is ₹2,16,000, above that threshold. The form also has an Aadhaar field, but its official FAQ says Aadhaar is not mandatory unless the employer specifically requests it. Do not invent either identifier or use a sample PAN.
A landlord’s actual acknowledgement and an editor’s signature image are different. Obtain the acknowledgement required for your rental record and employer process. The receipt editor’s built-in signature is a layout placeholder; it does not demonstrate that the landlord signed or approved anything.
Keep employer checks separate from eligibility
An employer may set submission deadlines, naming conventions and supporting-document checks. Those procedures do not change the statutory exemption conditions. Conversely, a completed receipt does not require the employer to accept missing evidence or an ineligible claim.
Use the rent receipt editor to arrange truthful details and the illustrated rent-receipt tutorial for the actual monthly workflow. Keep the landlord-issued or acknowledged evidence alongside any edited copy. If the rental facts or tax period differ, have payroll check the applicable treatment before claiming an amount.
Step-by-step workflow
1. Identify the tax year and regime
Write the income period at the top of your working file, then confirm the regime treatment with payroll. Do this before copying an old receipt checklist or calculator result. A document submitted during 2026 can relate to an earlier income period, so submission date alone does not tell you which rules apply.
2. Build a month-by-month rental schedule
List the rented property, actual rent, HRA received and relevant salary for each consistent period. Split the schedule when rent, pay, accommodation or allowance changes. Keep refundable deposits and separately charged utilities outside the rent figure unless the applicable treatment has been established.
3. Match the rental evidence
Compare the landlord and property details in the agreement, receipts and payments. Make sure a delayed bank transfer can still be connected with its rental month. Obtain actual acknowledgement through the accepted process; a default signature image or editable stamp is not a landlord’s approval.
4. Calculate and submit a traceable claim
Apply the three-way comparison for each qualifying period and retain the working. Complete the applicable employer claim statement and attach the required evidence. Record the submission and any clarification requested by payroll, then reconcile the result with the payroll statement rather than assuming the submitted figure was accepted.
Handle changes and mismatches before submission
A change of home during the year can alter both the rent and the applicable accommodation location. Treat the periods separately and preserve the agreements and payment evidence for each property. Do not blend the rent from one address with the salary period or location percentage from another simply to produce one annual number.
When rent is shared, the record should show the claimant’s actual arrangement and supported payment. An acknowledgement for the full property rent does not justify several people each using that full amount. Explain any shared payment or reimbursement between tenants and ask payroll what evidence it accepts for the specific facts.
If an employer requests a correction, identify the actual problem: missing agreement, a landlord detail, an inconsistent period or an arithmetic difference. Correct that item and preserve the link with the earlier submission. Changing the receipt date or inventing an identifier can create a second inconsistency instead of resolving the original one.
