Bengaluru, 7 Aug

The IT hub of Bengaluru has once again been denied the much-sought Metro status by Central government. The Capital City of Karnataka, known for its booming technology sector and rapid urbanisation, remains outside the desired category which includes four other major cities — Mumbai, Delhi, Kolkata and Chennai — in the country.

During the current monsoon session of Parliament, Union Minister of State for Finance Pankaj Chaudhary said Bengaluru would not be granted Metro status this time. Chaudhary referenced Rule 2A of Income Tax Rules, 1962, which differentiates between existing metro cities and others. This distinction impacts tax benefits, particularly regarding House Rent Allowance (HRA).

The metro designation carries financial advantages. For residents in metro cities, 50 per cent of their salary is considered for HRA tax exemptions under section 10(13A), compared to 40 per cent for those in non-metro areas. Bengaluru's exclusion means that its residents will continue to face higher tax liabilities compared to their counterparts in cities with metro status.

Chaudhary said the government cannot yet grant Bengaluru the metro status, citing existing policies and distinctions. “It has been the stated policy of the government to rationalise tax rates and move away from exemptions and deductions. Therefore, designating more cities as metro cities and extending the benefit of a higher exemption limit on HRA to such cities contradicts the stated policy,” Chaudhary said. –Salar News