Is Chennai a metro city for HRA exemption?

Yes. Chennai is one of the original four metro cities listed under Section 10(13A) of the Income Tax Act, along with Delhi, Mumbai, and Kolkata. The 50% of basic salary rate applies for HRA exemption. This has been the case since the section was framed and remains unchanged after Budget 2025.

What HRA percentage applies in Chennai?

50% of basic salary. This is the maximum HRA exemption cap that applies to Chennai residents under the old tax regime, subject to the standard three-condition test (lowest of actual HRA, rent minus 10% of basic, or 50% of basic).

Does the metro classification cover OMR, Tambaram and Porur?

Yes. Greater Chennai Corporation (GCC) area covers OMR (Old Mahabalipuram Road IT corridor up to Sholinganallur), Tambaram, Porur, Pallavaram, Avadi, and Ambattur. All these areas qualify for the 50% metro rate. Outlying panchayats in Kanchipuram and Tiruvallur districts not under GCC follow the 40% non-metro rate.

Is Coimbatore or Madurai a metro city for HRA?

No. Coimbatore, Madurai, Tiruchirappalli, Salem, and other Tamil Nadu cities outside Chennai are classified as non-metro for HRA purposes. The 40% rate applies in these cities. Only Chennai (Greater Chennai) qualifies as metro.

Is Chennai a Metro City for HRA? Yes

Q: Does the new tax regime allow HRA exemption in Chennai?

No. The new tax regime does not allow HRA exemption regardless of city. The 50% metro rate for Chennai only matters if you have opted for the old tax regime. For salaried IT professionals on OMR, HRA is often the main reason to stay on the old regime.

Quick Answer

Yes - Chennai is a metro city for HRA. The 50% of basic salary rate applies for HRA exemption under Section 10(13A) of the Income Tax Act.

Chennai has been classified as a metro city for HRA since Section 10(13A) was framed - it is one of the original four metros alongside Delhi, Mumbai, and Kolkata. Budget 2025 added four more cities (Bengaluru, Hyderabad, Pune, Ahmedabad) but Chennai's metro status was never in doubt.

What This Means for Your HRA Exemption

Worked example: an IT professional in Sholinganallur (OMR) with ₹50,000 monthly basic salary, ₹25,000 HRA in their CTC, and ₹22,000 monthly rent.

Condition	Annual Value
1. Actual HRA received	₹3,00,000
2. Rent paid - 10% of basic	₹2,04,000
3. 50% of basic (Chennai metro)	₹3,00,000
HRA exempt (least of 3)	₹2,04,000

In this example Condition 2 (rent minus 10% of basic) is the binding constraint. The 50% metro rate matters when monthly rent crosses roughly 35-40% of basic - typically in premium South Chennai locations like Boat Club, Nungambakkam, or sea-facing apartments in Adyar.

For a high-rent example: ₹50,000 basic, ₹25,000 HRA, ₹35,000 rent (premium 2BHK in Adyar or Anna Nagar):

If Chennai were non-metro (40%): exemption capped at ₹2,40,000
Chennai as metro (50%): exemption rises to ₹3,00,000 - that is ₹60,000 more deduction, worth ₹18,720 in tax saved at the 30% slab plus cess

The 8 Metro Cities for HRA (FY 2026-27)

Budget 2025 expanded the metro list from 4 to 8 cities, all eligible for the 50% HRA exemption rate:

Mumbai, Maharashtra
Delhi (NCT)
Kolkata, West Bengal
Chennai, Tamil Nadu
Bengaluru (Bangalore), Karnataka - added FY 2026-27
Hyderabad, Telangana - added FY 2026-27
Pune, Maharashtra - added FY 2026-27
Ahmedabad, Gujarat - added FY 2026-27

All other cities - including Coimbatore, Madurai, Tiruchirappalli, Salem - continue at the 40% non-metro rate.

Chennai-Specific Notes

GCC area: OMR, Tambaram, Porur all qualify

Greater Chennai Corporation (GCC) was expanded in 2011 to absorb adjoining municipalities. For HRA purposes, the entire GCC area qualifies - this includes the OMR IT corridor (Tidel Park, Sholinganallur, Siruseri), Tambaram, Pallavaram, Chromepet, Ambattur, Avadi, and Porur. All employees in these areas claim the 50% metro rate.

ECR and suburban districts

The East Coast Road (ECR) corridor south of Sholinganallur (including Akkarai, Kelambakkam, Kovalam) lies outside GCC and falls under Kanchipuram district panchayats - these are classified as non-metro at 40%. Similarly, Mahabalipuram and rural Kanchipuram are non-metro.

IT corridor reality

Most TCS, Infosys, Cognizant, Zoho employees in Chennai work along OMR (Old Mahabalipuram Road). The IT campuses themselves are inside GCC limits up to Sholinganallur. South of Sholinganallur, the OMR continues into Kanchipuram district - the rate depends on residential address, not office location.

How to Claim HRA in Chennai

Rent receipts - monthly receipts signed by the landlord, with revenue stamp if rent exceeds ₹3,000/month.
Rent agreement - registered if monthly rent is over ₹15,000 (Tamil Nadu Stamp Act rules apply).
Landlord PAN - mandatory if annual rent exceeds ₹1,00,000 (₹8,333/month). If landlord has no PAN, file Form 60 with employer.
Bank transfer proof - pay rent by NEFT/UPI, never cash. ITR scrutiny rejects cash-paid rent receipts almost automatically.
Form 12BB - submit to employer at the start of each financial year and update if rent changes.

Frequently Asked Questions

Is Chennai always a metro city for HRA?

Yes. Chennai has always been one of the four original metros under Section 10(13A) of the Income Tax Act, alongside Delhi, Mumbai, and Kolkata. Its 50% metro status has never changed.

Is OMR / Sholinganallur covered as Chennai metro for HRA?

Yes, up to Sholinganallur. Greater Chennai Corporation extends along OMR up to Sholinganallur. South of that, the area falls under Kanchipuram district panchayats which are classified as non-metro at 40%.

Is Coimbatore a metro city for HRA?

No. Coimbatore is classified as non-metro for HRA purposes. The 40% rate applies. Only Chennai qualifies as a metro city in Tamil Nadu under Section 10(13A).

Does HRA exemption apply in the new tax regime?

No. The new tax regime does not allow HRA exemption at all. The 50% metro rate for Chennai only matters if you have opted for the old tax regime. Compare both regimes - HRA is often the main reason to stay on old regime.

Is Tambaram / Chromepet considered Chennai metro?

Yes. Tambaram, Chromepet, Pallavaram, and Pammal were absorbed into Greater Chennai Corporation in 2011. These areas qualify for the 50% Chennai metro rate.

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Is Chennai a Metro City for HRA? Yes - 50% Rate Applies