Major Glitch in ITR Form: ‘Place of Work’ Mistaken for ‘Place of Residence’ in HRA Section

In Schedule 10(13A) of the Income Tax Return (ITR) form, which relates to the House Rent Allowance (HRA), a mistake has been discovered in the dropdown selection labelled “Place of Work”. There, the form is asking for the Place of Work of taxpayers; however, in reality, it should be asking for “Place of Residence”, because the HRA exemption under Section 10(13A) depends on where the taxpayer is residing, not where he/she is working. Which is actually a huge mistake made by the tax authorities that is being recently pointed out by a taxpayer on the platform ‘X’ (formerly Twitter).

Please note that this should be the Place of Residence, not the place of Work!@IncomeTaxIndia pic.twitter.com/unnrImonPX

— Pratibha Goyal (@PratibhaGoyal) July 15, 2025

This is a situation of concern for taxpayers, as if the form considers your place of work instead of your residence, and you work in a non-metro city but live in a metro city, then you might lose the opportunity of getting a 50% exemption and will only receive 40%. Hence, it reduces your total exemption by 10%. This results in increasing your taxable income and may lead you to pay a higher amount of tax.

The error needs to be corrected in the ITR utility form to reflect “Place of Residence”, not “Place of Work”. A taxpayer has highlighted this mistake on the platform ‘X’ (formerly Twitter), mentioning the Income Tax Department, catching their attention towards the mistake.

• Taxpayer said, “Please note that this should be the Place of Residence, not the place of Work! “
• In response, the Income Tax India said, “Please write to us with your details at http://bit.ly/3EIHJoi. Our team will get in touch with you.”

Reference of Section 10(13A)

Incomes not included in total income.

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 as may be prescribed having regard to the area or place in which such accommodation is situate and other relevant considerations.

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;

Reference of Rule 2A

Limits for the purposes of section 10(13A).

The amount which is not to be included in the total income of an assessee in respect of the special allowance referred to in clause (13A) of section 10 shall be—

(a) the actual amount of such allowance received by the assessee in respect of the relevant period; or

(b) 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; or

(c) an amount equal to—

(i) where such accommodation is situate at Bombay, Calcutta, Delhi or Madras, one-half of the amount of salary due to the assessee in respect of the relevant period; and

(ii) where such accommodation is situate at any other place, two-fifth of the amount of salary due to the assessee in respect of the relevant period,

(d) [***]

whichever is the least.

Explanation.—In this rule—

(i) “salary” shall have the meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule;

(ii) “relevant period” means the period during which the said accommodation was occupied by the assessee during the previous year.

(iii) [***]