India raises HRA tax exemption to 50% for Hyderabad employees
Payroll calculations must reflect higher exemption
Change
India’s CBDT increased HRA exemption to 50% of salary for Hyderabad-based employees effective April 1, 2026.
Why it matters
The rule change requires updated payroll and tax calculations for eligible employees in the specified city.
Implications
- — Employers must update payroll systems — withholding changes required
- — Incorrect application risks tax discrepancies — compliance exposure increases
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