Bengaluru South MP Tejasvi Surya appealed to the Union Finance Minister earlier this month to consider including Bengaluru in the list of 'metro cities' so that it benefits salaried employees who can claim full house rent exemption for income tax purposes. Speaking during the Zero Hour Discussion in the Parliament, Tejasvi Surya sought 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.
“I come from Bengaluru which has one of the highest salaried workforce in the country. Under existing rules, only Delhi, Mumbai, Kolkata and Chennai are considered as metros and the residents of these cities can claim upto 50% HRA deduction while the residents of the rest of 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 review 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 upto 50%,” he said.
He further said that the move will benefit middle class taxpayers in Bengaluru and other major cities that are yet to be considered as 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.
Currently, under the income tax rules, only four cities — Delhi, Mumbai, Kolkata and Chennai — fall under the category of metro cities. Bengaluru, with a population of more than 1.18 crore, is one of the biggest cities in the country and is considered a metropolitan city by the 74th Amendment to the Constitution which defined a metropolitan city as an area having a population of one million or more.
Bengaluru, which is the capital of Karnataka, 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.
Tejasvi Surya's speech in the Parliament was welcomed by many in Bengaluru, where the demand to consider the city as a metro has been long standing. A petition from five years ago on the non-profit petition website Change.org called for Bengaluru to be considered a metropolitan so that it benefits salaried employees.
Tejasvi Surya's appeal was lauded on social media by BJP sympathisers and critics alike with many lauding the move to raise this issue in the Parliament.
On this, I am fully with @Tejasvi_Surya . This is one of the very rare instances when he has raised an issue of real public concern in the Parliament. https://t.co/HgcXztuhHr
— Leo Saldanha (@leofsaldanha) December 22, 2022
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.
— Pratap Simha (@mepratap) December 13, 2022
Allowing larger HRA deductions in non-metro cities like will greatly benefit taxpayers even from cities like Mysuru. pic.twitter.com/qoAv9ZlRnM
Bengaluru (South) MP @Tejasvi_Surya has flagged an important issue regarding people in Metros like Bengaluru not being able to claim 50% deduction on their taxable income in respect of House Rent Allowance (HRA) due to archaic IT rules. @nsitharaman https://t.co/NxRSpJpbhi
— Gautham Machaiah (@GauthamMachaiah) December 22, 2022