The Bengaluru South MP made the appeal on behalf of several cities so that it benefits salaried employees who can claim full house rent exemption for income tax purposes.
Bengaluru’s ‘metro’ status
Bengaluru South MP Tejasvi Surya petitioned the Union Finance Minister to consider including Bengaluru in the list of ‘metro cities’ so that it helps salaried employees who can claim full house rent exemption for income tax purposes.
Speaking during the Zero Hour Discussion in Parliament, Tejasvi Surya strived to increase the House Rental Allowance (HRA) deduction permitted to calculate the Income Tax for residents in Bengaluru to 50% of the salary, like in other metropolitan cities.
74th Amendment to the Constitution
There are 23 metros in India, according to the 74th Amendment to the Constitution which described a metropolitan city as an area having a population of one million or more. But archaic Income Tax rules recognize only New Delhi, Mumbai, Kolkata, and Chennai as metros where an individual can claim up to 50 percent deduction on their taxable income in respect of their House Rent Allowance (HRA). Those in other cities are entitled to a 40 percent deduction, reported Deccan Herald.
“I come from Bengaluru which has one of the highest salaried workforces in the country. Under current rules, only Delhi, Mumbai, Kolkata, and Chennai are regarded as metros and the residents of these cities can claim upto 50% HRA deduction while the residents of the rest of the cities in India, including Bengaluru, can claim only 40% deduction of the salary as HRA,” Tejasvi Surya said in the Parliament.
“I request FM to inspect the I-T rules and add cities like Bengaluru and such similarly placed cities in the list of metropolitan cities under Income Tax Rules for the purpose of Housing Rental Allowance deduction up to 50%,” he said.
MP @Tejasvi_Surya raises important point in Zero Hour today. Residents in non-metro cities can claim only 40% of salary as HRA deduction under Income Tax rules.
Allowing larger HRA deductions in non-metro cities like will greatly benefit taxpayers even from cities like Mysuru. pic.twitter.com/qoAv9ZlRnM
— Pratap Simha (@mepratap) December 13, 2022
Eligible Metro cities
As per the 1992 Amendment, the metros are Ahmedabad, Bengaluru, Chennai, Coimbatore, Gorakhpur, Hyderabad, Jaipur, Jodhpur, Kanpur, Kochi, Kolkata, Kozhikode, Madurai, Mumbai, Nagpur, the National Capital Region, Patna, Pune, Raipur, Salem, Surat, Thiruvananthapuram, and Visakhapatnam.
The MP from South Bengaluru further stated that the move will help middle-class taxpayers in Bengaluru and other major cities that are yet to be considered metropolitan cities under Income Tax rules. “With newer cities growing and the cost of housing being high in these cities, it is necessary for other cities, especially Bengaluru, to also be considered as metros. This will greatly benefit crores of middle-class taxpayers across the country,” Tejasvi Surya said.
Silicon city of India has a population of 8.4 million and contributes the most (80%) to the GDP of the state. It is home to dozens of tech parks and in 2020, the IT sector employed more than 1.5 million people in Bengaluru.
Finance Minister Nirmala Sitaraman must consider Surya’s request and ensure that the people of all metros are treated equally, considering that the ground realities have greatly changed between now and when the tax laws were prepared. The move will help millions of middle-class families. The rules, as they stand today, are biased and actually punish hardworking people who are fuelling the country’s economic development.
