Daijiworld Media Network – New Delhi

New Delhi, Feb 11: Bengaluru has been added to the list of metro cities under the Income Tax Department’s draft 2026 PAN rules, a move that will allow residents to claim higher House Rent Allowance (HRA) and other employee benefits. The draft proposal, submitted by the department, is likely to come into effect from April 1.

The Central Board of Direct Taxes (CBDT) has released the draft rules and forms for public feedback, which can be submitted until the end of February. Officials said the final notification is expected in the first week of March.

Key highlights benefiting Bengaluru residents

• Metro City status and HRA: Bengaluru, along with Pune, Ahmedabad, and Hyderabad, is now classified as a metro city for HRA purposes. Previously, only Delhi, Mumbai, Chennai, and Kolkata were on the list. Officials said this change “will allow Bengaluru employees to claim higher HRA exemptions,” boosting their take-home pay.

• Food and fuel allowance: The draft fixes food allowance for employees at Rs 50 per meal. Fuel allowance has been standardised at Rs 8,000 per month for cars below 1.6-litre engine capacity and Rs 10,000 for larger vehicles, including driver allowance.

• Cash transaction reporting: Individuals depositing or withdrawing Rs 10 lac or more in a financial year, across one or multiple accounts, must provide their PAN number. Previously, PAN reporting was required only for daily transactions above Rs 50,000.

• Property, insurance, and investments: PAN will now be mandatory for life insurance transactions of any amount and property or joint venture investments exceeding Rs 20 lac, up from the previous Rs 10 lac threshold.

• Motor vehicle purchase and payments: PAN is required only for vehicles costing over Rs 5 lac, and for single payments of Rs 1 lac or more at hotels, restaurants, or event management services. Earlier, the threshold for both was lower.

• Simplification of rules and forms: The draft reduces old provisions from 511 to 333 and cuts the number of forms from 399 to 190, streamlining compliance for taxpayers.

Officials said the changes are aimed at simplifying tax compliance, enhancing transparency, and integrating digital payment mechanisms. The inclusion of Bengaluru among metro cities is expected to directly benefit thousands of employees in the city by increasing HRA and standardising allowances.