New HRA Rules: Metro City List Expands, Boosting Tax Savings for Employees

• New HRA rules implemented, expanding the list of metro cities for tax exemption calculations.
• Hyderabad, Bengaluru, Pune, and Ahmedabad are now considered metro cities, joining Delhi, Mumbai, Chennai, and Kolkata.
• Employees in these newly added metro cities can now use 50% of their salary for HRA calculation, up from 40%.
• This change increases HRA exemption, reducing taxable income, as explained by CA Akhil Kancharla.
• HRA exemption is only available under the Old Tax Regime; careful consideration is needed when choosing between tax regimes.