Bengaluru unlikely to be considered as ‘metro’ city in income tax rules, centre not to grant status for new cities

If included in metro cities, Bengaluru income taxpayers would be able to claim a 50% exemption on salary equivalent to HRA, just like other cities.

The long-standing demand to grant Bengaluru ‘metro’ status in Income Tax rules is likely to remain a dream. The central government clarified that it cannot add Bengaluru to the list of other metro cities in the country, reported Bangalore Mirror.

Bengaluru unlikely to be considered as ‘metro’ city in income tax rules, centre not to grant status for new cities (pinterest)

According to the report, Union minister of state in the ministry of finance, Pankaj Chaudhary said that there is no plan to change the current policy of the government and adding new cities to the metro list. According to the rule 2A of income tax rules, 1962, a distinction exists between the cities of Delhi, Mumbai, Chennai and Kolkata regarding the special allowance for residential accommodation under section 10(13A) of Income tax act.

If included in metro cities, Bengaluru income taxpayers would be able to claim a 50% exemption on salary equivalent to HRA, just like other cities.

Earlier in the Parliament, Karnataka BJP MP Tejasvi Surya urged finance minister Nirmala Sitharaman to include Bengaluru in the list of metro cities. He then said, “Salaried middle-class people of this country have a major concern. Under the current income tax rules, only four cities fall under metro cities and those are Delhi, Mumbai, Kolkata and Chennai. My city - Bengaluru - has a high number of salaried employees and I request you bring the city under metro cities.”

He also said that the move would help the middle-class people living in the city. “Residents of big cities like Bengaluru... can claim HRA deduction upto 40 per cent only under existing rules. Including Bengaluru and new growing cities as metros will greatly benefit crores of middle-class taxpayers across the country,” he added.