Table of Contents
- 1 Is Bangalore considered a metro city for HRA?
- 2 What is metropolitan cities as per income tax?
- 3 Why Bangalore is not Metro for HRA?
- 4 What are the rules for HRA exemption?
- 5 How is HRA exemption calculated for non-metro city?
- 6 What is the HRA for income tax exemption in India?
- 7 Does Benda Kalu Ooru get higher income tax exemption than Bengaluru?
Is Bangalore considered a metro city for HRA?
Currently, as per the Income Tax provisions, only four cities in India (Delhi, Mumbai, Chennai and Kolkata) are considered to be metro cities and are allowed to have 50\% of the basic salary as the House Rent Allowance (HRA).
What is the exempted limit of HRA in metropolitan cities?
50\% of the employee salary is eligible for HRA tax exemption if he or she lives in any of the Metro cities of India. The metropolitan cities of India include Delhi, Mumbai, Calcutta and Chennai. In case the employee lives in any other city then 40\% of the salary can be HRA exempted.
What is metropolitan cities as per income tax?
As per Income Tax provisions, only Delhi, Mumbai, Chennai and Kolkata are considered as metro cities in India.
What is metro and non metro?
The US Office of Management and Budget defines metropolitan (metro) regions as a set of counties around a city with a population of 50,000 or more. Other counties are considered to be in a non-metropolitan (non-metro) region).
Why Bangalore is not Metro for HRA?
As the government is collecting higher taxes from the individuals in Bangalore (40\% HRA exemption) than those in Chennai and Kolkata (50\% HRA exemption), it will result in a considerable amount of revenues (in the form of income tax) forgone to the government if Bangalore or Hyderabad is extended the HRA exemption of …
How is HRA tax exemption calculated?
How is Exemption on HRA calculated?
- Actual HRA received from employer.
- For those living in metro cities: 50\% of (Basic salary + Dearness allowance) For those living in non-metro cities: 40\% of (Basic salary + Dearness allowance)
- Actual rent paid minus 10\% of (Basic salary + Dearness allowance)
What are the rules for HRA exemption?
The exemption on your HRA benefit is the minimum of:
- The actual HRA received,
- rent paid annually reduced by 10\% of salary,
- 50\% of your basic salary (if you live in a metro city), and.
- 40\% of your basic salary (if you live in a non-metro city).
What is HRA for Metro city?
For a metro city, the HRA is 50\% of salary (Basic +DA). For a non-metro city, the HRA is 40\% of salary (Basic + DA).
How is HRA exemption calculated for non-metro city?
Is Bangalore a Metro City for HRA exemption?
Bangalore to be considered in metro cities list for HRA exemption. Currently, as per the Income Tax provisions, only four cities in India (Delhi, Mumbai, Chennai and Kolkata) are considered to be metro cities and are allowed to have 50\% of the basic salary as the House Rent Allowance (HRA).
What is the HRA for income tax exemption in India?
As per the Income tax act, the allowed HRA for the income tax exemption is 50\% of basic salary for metro cities (Delhi, Mumbai, Chennai and Kolkata) and 40\% of basic salary for non-metro cities (all other cities), which is unfair.
Is Bangalore a metro city under Income Tax Act?
No. Bangalore does not come under Metro Cities specified under Rule 2A prescribing quantum of exemption for the purpose of HRA under Income Tax Act. Only four cities viz. Bombay/Calcutta/Delhi/Madras are considered as Metro Cities. Anoopa H P (Member of ICAI CS Executive) 13 December 2018
Does Benda Kalu Ooru get higher income tax exemption than Bengaluru?
So the HRA is 40\%. The higher exemption in Income Tax (not Act but Rules) is to 4 specific cities, not metropolitan cities. Hence no matter if Benda Kalu Ooru became a metropolitan city Bengaluru, it doesn’t get higher Income Tax Exemption.