HRA Exemption for Bangalore, Mumbai and Delhi
Mumbai and Delhi use the 50% of salary limb because they are named metro cities for HRA. Bangalore uses 40%. In the worked case, rent minus 10% of salary is the smallest limb, so all three produce the same ₹2.4 lakh exemption.
Tax with ₹2.4 lakh HRA exemption
₹1,35,720 in the old regime
The same ₹15 lakh salary pays ₹97,500 in the new-regime example.
Worked city comparison
Assume HRA received of ₹3 lakh, salary for HRA purposes of ₹6 lakh and annual rent of ₹3 lakh. The exemption is the least of actual HRA, rent minus 10% of salary, and 40% or 50% of salary.
| City | Percentage limb | Actual HRA | Rent minus 10% | Exemption |
|---|---|---|---|---|
| Bangalore | 40% = ₹2.40L | ₹3.00L | ₹2.40L | ₹2.40L |
| Mumbai | 50% = ₹3.00L | ₹3.00L | ₹2.40L | ₹2.40L |
| Delhi | 50% = ₹3.00L | ₹3.00L | ₹2.40L | ₹2.40L |
Why metro status may not change your answer
The percentage limb matters only when it is the lowest of the three values. Here, rent minus 10% of salary caps the exemption before the Bangalore percentage can reduce it further.
Use salary as defined for HRA purposes and the period actually spent in each city. Do not apply 50% merely because a city is expensive.
Check the official rules
Tax rules depend on the financial year and the facts of your return. Verify the current provisions on the Income Tax Department portal before filing.
Frequently Asked Questions
Is Bangalore a metro city for HRA?
Do Mumbai and Delhi always give a bigger exemption?
Can HRA exemption be claimed under the new regime?
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Written by Amir Khan, a contributor to RupeeReality: free financial calculators for Indian investors. All calculations use standard financial formulas cross-referenced against established platforms. Numbers updated for FY 2026-27. Not financial advice.