Hra allowance

Point b of Rule 2A of Income Tax Rules clearly states that

"the amount by which the expenditure actually incurred by the assessee in payment of rent in respect of residential accommodation occupied by him exceeds one-tenth of the amount of salary due to the assessee in respect of the relevant period"

In case, the assessee does not pay rent during the previous year, he will not get any allowance under Sec 10(13A). Full HRA will be taxable.

In one of the clarification given by the income tax department, it has been stated:

"Though for purposes of grant of house rent allowance, a rent receipt may not be insisted upon by Government, it is necessary for granting the exemption under section 10(13A) that the employee should have actually incurred the expenditure on rent. For purposes of deduction of tax, therefore, the disbursing officer should ensure that the employee concerned has in fact incurred the expenditure on rent. The payment of rent should be verified through rent receipts in the cases of all employees."

If rent is paid half yearly or yearly, but has been actually incurred on or before the due date of filling of return, it shall be considered as paid.

And the person is eligible for the benefit of exemption.

But if no rent has been paid. Then no exemption can be claimed.