In a major income tax relief move, the Indian government is planning to expand the House Rent Allowance (HRA) exemption, extending the 50% exemption benefit to select metro cities and newly categorized urban areas. This proposal could provide significant tax savings to millions of salaried taxpayers living in high-cost urban centres, especially where rental costs have surged in recent years. If implemented, the expanded HRA rules are expected to come into effect in the coming financial year — giving employees greater relief on taxable income and increasing disposable income for workers in expensive metropolitan regions. What the Proposed HRA Expansion Means for Taxpayers Under the current income tax rules, salaried taxpayers can claim HRA exemption on rent paid, but the benefit is limited to a percentage of basic salary and depends on the city of residence. Traditionally, the 50% HRA exemption applies mainly to Tier-I cities such as Delhi, Mumbai, Chennai and Kolkata. The new proposal seeks to expand this higher exemption cap to include additional metros and growing urban centres where housing costs are comparable to existing Tier-I cities. This means employees in these areas would be able to exclude up to 50% of their basic salary from taxable… Read MoreBusiness Archives – Trak.in – Indian Business of Tech, Mobile & Startups
