HRA Exemption in Bengaluru (Bangalore)
Bengaluru follows the 50% HRA rule for FY 2026-27. See a worked example and the three-rule breakdown that decides your tax-free HRA.
New for FY 2026-27: Bengaluru was moved into the 50% HRA bracket by the Income Tax Rules 2026 (effective 1 April 2026), alongside Pune, Hyderabad, Ahmedabad and Bengaluru. Older guides that still call it a 40% non-metro city are out of date.
City Rule
50% of Basic+DA
Annual Exemption
₹3.06 L
Annual Taxable HRA
₹6,000
Limiting Rule
Rent paid minus 10% of salary
Worked Example for Bengaluru
₹65,000
₹26,000
₹32,000
50%
Three-Rule Comparison (Annual)
| Rule | Annual Amount |
|---|---|
| Actual HRA received | ₹3.12 L |
| 50% of Basic + DA | ₹3.90 L |
| Rent − 10% of Basic + DA lowest: applies | ₹3.06 L |
₹3.06 L
₹6,000
Rent paid minus 10% of salary
How HRA Exemption Works in Bengaluru
Bengaluru moved from the 40% to the 50% bracket in 2026: a meaningful upgrade for its large salaried IT workforce, where IT-corridor 2BHK rents reach ₹55,000.
House Rent Allowance exemption under Section 10(13A) is the same formula everywhere: the only city-specific part is whether the second rule uses 50% or 40% of your Basic + DA. Bengaluru is on the 50% list for FY 2026-27, so the second-rule cap is half of your Basic + DA. Your tax-free HRA is the lowest of the three rules, so a higher percentage cap only helps if it is not already limited by your actual HRA or rent.
The Three Rules
- Actual HRA received from your employer
- 50% of Basic + DA: the metro cap for Bengaluru
- Rent paid − 10% of Basic + DA
Old vs New Regime
HRA exemption is available only under the old tax regime. If you opt for the new regime, your entire HRA is taxable, no matter which city you live in. From FY 2026-27 you must also disclose your relationship with the landlord when claiming HRA, and provide the landlord's PAN if annual rent exceeds ₹1 lakh.