No Metro Recognition for Bengaluru, Here Are the Reasons
Despite its rapid growth and status as a tech hub, Bengaluru has not been granted ‘Metro’ status for House Rent Allowance (HRA) tax exemptions. Union Minister Pankaj Chaudhary explained the policy’s basis and the government’s stance.
- Income Tax Distinction: Under Rule 2A of the Income-tax Rules, 1962, only Mumbai, Kolkata, Delhi, and Chennai are considered metropolitan cities for HRA exemptions.
- Exemption Limits: Residents of these metros get a 50% salary consideration for HRA exemptions, while Bengaluru and other cities get 40%.
- Policy Explanation: The government aims to rationalize tax rates and reduce exemptions, making it inconsistent to grant more cities metro status for HRA benefits.
- No Policy Change: Chaudhary confirmed no current plans to change the policy.
- Historical Demand: There have been long-standing demands to recognize Bengaluru as a metro for HRA purposes.
- Potential Benefits: Metro status could reduce taxable income for Bengaluru residents due to the high housing costs.
- Economic Impact: Recognition as a metro city could have provided significant financial relief.
- Industrial Perspective: Industrialists argue that it would make attracting and retaining skilled employees easier.
- Living Costs: Higher HRA exemptions could help employees better manage Bengaluru’s high living expenses.
- Future Considerations: As Bengaluru continues to grow, the push for metro status and reconsideration of tax policies may intensify.
Follow Us
