Aid to lakhs: B’luru added to 50% HRA exemption checklist in I-T draft guidelines | Bengaluru Information – The Instances of India

Bengaluru: Salaried workforce of Bengaluru is about for a major tax aid with the draft Earnings Tax Guidelines, 2026, proposing to position the town within the class eligible for 50% Home Lease Allowance (HRA) exemption.The profit, till now reserved for Delhi, Mumbai, Kolkata and Chennai, would carry Bengaluru on par with the standard metros and lift the deduction ceiling from the current 40%. Hyderabad, Pune and Ahmedabad have additionally been included within the expanded checklist.The change, as soon as notified, is anticipated to assist lakhs of staff dealing with steep leases within the expertise capital. As per the I-T Act, 1961, salaried staff can declare exemption of HRA of their wage tax computation, and the the least of the next is exempt: “Precise HRA obtained; 40% of primary wage plus dearness allowance [50% in case of employees working in metros]; extra of lease paid over 10% of wage”.The distinction could seem small however interprets into tangible financial savings. Again-of-the-envelope calculations present that for a employee with a primary wage of Rs 30,000 a month, the upper restrict would elevate the exempt quantity by Rs 3,000, providing annual tax financial savings near Rs 10,000 for these within the 30% bracket.In Jan 2024, TOI ran a marketing campaign for Bengaluru’s inclusion within the checklist of metro cities, which presents the extra HRA exemption. Whereas the brand new draft guidelines do not explicitly name Bengaluru as a “metropolitan metropolis’, it has added its identify within the checklist that up to now had solely the 4 metro cities of Delhi, Mumbai, Kolkata and Chennai.Bangalore South MP Tejasvi Surya, describing it as the results of years of illustration, mentioned it was a “large bonus”. Surya has been advocating that Bengaluru be added to the metropolitan cities’ checklist below I-T guidelines since 2020.“Having intently seen how my father, an everyday salaried worker, struggled with HRA, this marketing campaign was additionally private to me. Bengaluru, as a metropolis, deserves to be added to the checklist of metros and I am completely happy that I had a job to play in it. It has been a persistent effort,” Surya advised TOI on Tuesday.The choice marks a reversal of the place the Union finance ministry had taken barely 18 months in the past. In Aug 2024, as reported by TOI, Parliament was advised that including extra cities to the metro checklist would run towards the govt.’s coverage of rationalising exemptions. That stand had drawn criticism from Karnataka leaders and trade voices who argued that the foundations mirrored an outdated view of city India. Bengaluru, regardless of being a serious contributor to I-T collections and residential to one of many nation’s largest salaried populations, remained exterior the privileged bracket.The inclusion carries symbolic weight. Enterprise leaders have lengthy mentioned that international buyers already deal with Bengaluru as a metropolis even when the tax code didn’t. With the brand new guidelines, the town lastly receives formal recognition that aligns coverage with its financial stature and the every day prices borne by its residents. The draft guidelines additionally enable greater transport allowance of as much as Rs 15,000 for workers with disabilities within the notified cities.