If a person pays rent in the place where he works then he can claim deduction u/s 10(13A).
The section is reproduced below...
(13A) any special allowance specifically granted to an assessee by his employer to meet expenditure actually incurred on payment of rent (by whatever name called) in respect of residential accommodation occupied by the assessee, to such extent 36[* * *] as may be prescribed37 having regard to the area or place in which such accommodation is situate and other relevant considerations.]
38[Explanation.—For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply in a case where—
(a) the residential accommodation occupied by the assessee is owned by him ; or
(b) the assessee has not actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him ;]
It is noteworthy that if the paid is 10% or less than 10% of the salary then no exemption can be claimed under the section (by virtue of the compuation)