HRA relief: Bengaluru, Hyderabad, Pune and Ahmedabad now get the 50% exemption limit
Under the Income-tax Rules 2026, salaried people in four more cities can claim HRA exemption up to 50% of basic pay from tax year 2026-27.
Salaried taxpayers in Bengaluru, Hyderabad, Pune and Ahmedabad can now claim House Rent Allowance (HRA) exemption of up to 50% of basic + DA, up from 40%. The change applies from 1 April 2026 under Rule 279 of the Income-tax Rules, 2026.
The 8 cities with the 50% limit
Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. All other cities stay at 40%.
Example
A Bengaluru employee with basic pay of ₹50,000 a month, HRA of ₹30,000 and rent of ₹40,000 can now claim ₹3,00,000 exempt HRA for the year, against ₹2,40,000 earlier — ₹60,000 more tax-free income.
Keep in mind
- HRA exemption is available only in the old tax regime.
- Give your employer the landlord’s PAN if rent is above ₹1,00,000 a year.
Check your exemption with the free HRA calculator.
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