Which Indian cities cross the Rule 26C ₹1 lakh threshold — 24-city median rent analysis, May 2026

Rule 26C^[1] activates when annual rent crosses Rs 1,00,000 — equivalent to Rs 8,334 per month. Above that line, the employer must collect the landlord's name, address, and PAN (or a CBDT Circular 8/2013^[3] plain-paper declaration if PAN is unavailable) before granting HRA exemption at the TDS stage. Below the line, only the Section 10(13A)^[2] standard HRA computation applies — receipts collected at year-end, no PAN block at the employer side. The threshold is one of the most consequential bright lines in Indian salaried tax compliance, yet it is rarely measured against actual city-level rent data.

The grid above does that for 24 cities — every Tier-1 metro, the NCR and MMR satellite belts, and the largest Tier-2 cities — using median listing rents from H1 2026. Twenty-three of the twenty-four cross the threshold on a 1BHK alone. Visakhapatnam is the single exception: its 1BHK median of Rs 7,500 sits below the Rs 8,334 line. The nearest cities above it are Surat (1BHK Rs 8,500) and Bhopal (Rs 8,750) — both clear of the cutoff, though close enough that a share of sub-median renters there can still fall below it. All twenty-four cities cross on a 2BHK median — there is no Indian metro left where two-bedroom rentals can plausibly stay below Rs 1 lakh per year.

For HR teams and payroll vendors, the implication is uniform: virtually no Indian salaried renter in a Tier-1 or NCR/MMR submarket escapes Rule 26C. The receipt-acceptance workflow must default to PAN-or-declaration collection on every HRA claim above this set, with the Rs 1 lakh threshold treated as a presumptive trigger rather than a per-employee check. Mid-year rent escalations matter most where the 1BHK median sits near the line — Visakhapatnam below it, Surat and Bhopal just above — because a tenant starting at Rs 8,000 can cross the threshold in month seven and retroactively activate Rule 26C for the year. Payroll software that gates Rule 26C only at year-end mis-handles these cases.

The companion CSV below carries the underlying data — city, tier, 1BHK median, 2BHK median, and threshold status for each — released under CC-BY-4.0. Methodology: listings drawn from the largest two India rental aggregators in May 2026, filtered to standalone units (PG, co-living, and bed-share excluded), medians taken on the filtered set; cross-checked against state-level RERA registered-transaction data where available. Threshold status flags each median as above or below the Rs 8,334 cutoff. Methodology and source-level reconciliation are documented in the parent article.