Sec.10(13A) of the Income Tax Act, 1961 allows exemption from HRA (House Rent Allowance) received from the employer. The amount of HRA exemption should be least of the following-

1. Actual HRA received; OR
2. Actual rent paid minus 10% of the salary; OR
3. 50% / 40% of the salary. [50%, if house is situated in Mumbai, Delhi, Kolkata or Chennai and 40% for other cities]

Where salary means Basic + Dearness Allowance[DA] (if part of retirement benefit) + Turnover based Commission