{"id":4840,"date":"2026-02-12T16:00:00","date_gmt":"2026-02-12T10:30:00","guid":{"rendered":"https:\/\/tradebrains.in\/money\/?p=4840"},"modified":"2026-02-12T14:53:42","modified_gmt":"2026-02-12T09:23:42","slug":"bengaluru-hyderabad-and-6-other-cities-eligible-for-50-hra-exemption-under-the-draft-income-tax-rules-2026","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/money\/bengaluru-hyderabad-and-6-other-cities-eligible-for-50-hra-exemption-under-the-draft-income-tax-rules-2026\/","title":{"rendered":"Bengaluru, Hyderabad and 6 Other Cities Eligible for 50% HRA Exemption Under the Draft Income Tax Rules 2026"},"content":{"rendered":"\n
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Synopsis:<\/strong> The Draft IT-Rules 2026 propose expanding the 50% HRA exemption to 4 more cities including Bengaluru, Hyderabad and 2 more that have seen sharp rise in rental housing costs in recent years.<\/em><\/p>\n<\/blockquote>\n\n\n\n

The draft Income Tax Rules, 2026, also creates a paradigm change in House Rent Allowance (HRA) exemptions to salaried taxpayers who choose the old tax regime. At present, four cities, namely, Delhi, Mumbai, Kolkata and Chennai are eligible to be called metro and hence the employees are entitled to upto 50 percent of HRA exemption of their Basic salary plus Dearness Allowance (DA). But for rest of the cities, it is restricted to 40%.<\/p>

\"scapia<\/a><\/div>\n\n\n\n

This is a proposal that was put forward in Rule 279 in the Schedule III which is in response to long-term demands in high-rent cities such as Bengaluru. It is geared towards offering equality to the professionals who experience high housing rates in the expanding urban centers of India. It was celebrated as a big bonus by Bengaluru South MP Tejasvi Surya who had been championing it since 2022.<\/p>\n\n\n\n

Present-day HRA Exemption Structure<\/strong><\/h2>\n\n\n\n

Calculation of HRA exemption is based on the minimum of three figures, namely, actual HRA received, rent paid less 10 percent of salary, and 50 percent\/40 percent salary according to city classification. To metro inhabitants, this limit is 50% of (basic salary + DA); the non-metros receive 40%.<\/p>