House Rent Deduction Without HRA: Section 134, Income Tax Act 2025

Section 134 of the Income Tax Act, 2025 allows a deduction for rent you pay on a home you live in, even if you get no house rent allowance (HRA) from an employer. The deduction is the least of three amounts: Rs 5,000 per month, 25% of your total income, and the rent paid minus 10% of your total income. You also file a declaration in Form 31 under rule 65 of the Income-tax Rules, 2026.

This guide covers who can claim, how the limit works, who is excluded and how to calculate it. Every figure is taken from the Act (as amended by the Finance Act, 2026) and the Rules, effective 1 April 2026. Examples use tax year 2026-27. Last reviewed against that text on 10 November 2026. It is information, not tax advice.

What is the rent deduction under section 134?

Under section 134(1), in computing your total income you can deduct the rent (by whatever name called) you actually pay for a furnished or unfurnished home that you occupy for your own residence. "Total income" is defined in section 2(108) as the total amount of income referred to in section 5, computed as the Act lays down.

The section is built for people who have no HRA to claim, such as the self-employed, professionals, freelancers and employees whose employer pays no rent allowance.

How much can I deduct? The three-way limit

Section 134(2) allows the deduction only on rent that exceeds 10% of your total income, capped at Rs 5,000 per month or 25% of total income for the tax year, whichever is less. In practice you work out three figures and take the lowest:

Test	Amount	Source
(a) Monthly cap	Rs 5,000 x months for which rent is paid	Section 134(2)
(b) Share of income	25% of total income	Section 134(2)
(c) Rent above 10% of income	Rent paid in the year minus 10% of total income	Section 134(2)

Both "10% of total income" and "25% of total income" are measured on your total income before this deduction (section 134(5)). So you cannot lower the base first and then claim against the lower figure.

Who cannot claim the deduction?

Section 134(4) denies the deduction in three situations.

• You or your family own a home where you live or work. No deduction if residential accommodation is owned by you, your spouse or your minor child, or by your HUF if you are a member, at the place where you ordinarily reside or perform duties of your office, employment, business or profession (section 134(4)(a)(i)).
• You own a home elsewhere that you occupy and treat as self-occupied. No deduction if you own accommodation at any other place that you occupy and whose value is determined under section 21(6) or 21(7)(a), that is, a self-occupied house with nil annual value, limited to two houses of your choice (section 134(4)(a)(ii)).
• You have income under Schedule III, Sl. No. 11. That entry covers a special allowance from an employer for rent, with conditions (section 134(4)(b)).

What if I get HRA from my employer?

Schedule III, Sl. No. 11 is the entry for a special allowance from an employer, kept out of total income when it is specifically granted for rent actually paid, to the extent prescribed, the accommodation is not owned by you and you actually incurred the rent. Section 134(4)(b) says that if you have income falling in that entry, you cannot claim section 134. The two routes do not overlap. For how salary items are taxed more generally, see our guide to income from salary under the 2025 Act.

What is Form 31 and who files it?

Rule 65 of the Income-tax Rules, 2026 says that to claim the deduction under section 134 you must file a declaration in Form No. 31. Section 134(3) also allows further conditions or limits based on the area or place of the accommodation. The rule files I reviewed prescribe the Form 31 declaration and no separate area-based limit, so check the Form 31 instructions before you file.

Can I claim it under the default tax rates of section 202?

Section 134 sits in Chapter VIII (deductions). Section 202(2)(a)(xii) says total income under the default rates of section 202(1) is computed without any Chapter VIII deduction, except sections 124(1), 124(2), 125(2) and 146. Section 134 is not on that list, so you cannot claim it on the default rates. It is relevant only if you exercise the option under section 202(4) and are taxed on the other basis. Check which basis applies before you collect a Form 31.

Worked example 1: the monthly cap is the limit

Ravi is a consultant who pays Rs 12,000 a month for 12 months in tax year 2026-27. His total income before this deduction is Rs 4,80,000. He owns no home and gets no HRA.

Step	Working	Amount (Rs)
Rent paid in the year	12,000 x 12	1,44,000
(a) Monthly cap	5,000 x 12	60,000
(b) 25% of total income	25% of 4,80,000	1,20,000
(c) Rent minus 10% of income	1,44,000 minus 48,000	96,000
Deduction (lowest)	(a) is lowest	60,000
Total income after deduction	4,80,000 minus 60,000	4,20,000

Worked example 2: the 10% floor is the limit

Meena is a freelance designer paying Rs 6,000 a month for 12 months in tax year 2026-27. Her total income before this deduction is Rs 2,40,000.

Step	Working	Amount (Rs)
Rent paid in the year	6,000 x 12	72,000
(a) Monthly cap	5,000 x 12	60,000
(b) 25% of total income	25% of 2,40,000	60,000
(c) Rent minus 10% of income	72,000 minus 24,000	48,000
Deduction (lowest)	(c) is lowest	48,000
Total income after deduction	2,40,000 minus 48,000	1,92,000

Worked example 3: rent paid for part of the year

Kabir moves into a rented flat and pays Rs 7,000 a month for 8 months in tax year 2026-27. His total income before this deduction is Rs 3,60,000. The monthly cap is applied to the 8 months of rent paid.

Step	Working	Amount (Rs)
Rent paid in the year	7,000 x 8	56,000
(a) Monthly cap	5,000 x 8	40,000
(b) 25% of total income	25% of 3,60,000	90,000
(c) Rent minus 10% of income	56,000 minus 36,000	20,000
Deduction (lowest)	(c) is lowest	20,000

Real-life situations

Anita owns a flat in her home city and rents one where she works. Section 134(4)(a)(i) bars the deduction when residential accommodation is owned by you at the place where you ordinarily reside or carry on your work. Her flat is in another city, so she has to check whether it is accommodation she occupies and shows at nil annual value under section 21(6) or 21(7)(a), which would bar the claim under section 134(4)(a)(ii). If she lets it out, section 21(7)(b) means nil value does not apply to it.

Sunil is a salaried employee with an HRA component. If his employer's rent allowance meets the conditions of Schedule III, Sl. No. 11 (granted for rent actually paid, to the prescribed extent, on a home he does not own), he has income falling in that entry and section 134(4)(b) blocks section 134. He should check whether it does. If he had no such allowance, he could claim it with a Form 31 declaration.

Common mistakes

• Measuring 10% and 25% on income after the rent deduction. Section 134(5) uses total income before it.
• Claiming for a home owned by a spouse, minor child or your HUF at the place you live or work.
• Claiming the Rs 5,000 monthly cap for all twelve months when rent was paid for fewer months.
• Claiming it while also receiving an employer's rent allowance in Schedule III, Sl. No. 11.
• Forgetting the Form 31 declaration required by rule 65.

Quick reference

Item	Rule
Who	Any assessee paying rent for own residence (section 134(1))
Monthly cap	Rs 5,000 per month (section 134(2))
Income cap	25% of total income before the deduction
Floor	Only rent above 10% of total income counts
Declaration	Form No. 31 (rule 65)
Excluded	Own or family home at place of residence or work; self-occupied house at nil value; Schedule III Sl. No. 11 income

Where this is in the Act

• Section 134: deductions in respect of rents paid
• Section 21(6) and 21(7)(a): self-occupied house at nil annual value, two houses
• Schedule III, Sl. No. 11: special allowance from employer for rent
• Section 2(108): total income
• Rule 65, Income-tax Rules, 2026: Form No. 31 declaration

For a CA firm, the effort is tracking which clients pay rent, which have HRA, and which Form 31 declarations are collected. Finexo's practice management software keeps client-wise task lists and document requests in one place. It does not compute the deduction or file the form for you.