Dear,
1. HRA exemption program is developed in SAP based on India legal rules.
2. If who will be HRA exempted under 40%(Non-Metro) or 50%(Metro) you will have to maintain Metro or non metro in info type 0581.
3. HRA exemption will be effected in Income tax calculation.
4. HRA Exemption amount will be reflected in Form 16.
5. If 50% HRA exemption will be deducted even if client will maintain non-metro in info type 0581 I hope so SAP standard system won't support because entire program has to be changed & Form 16 also has to be customized.
Instead of this clearly explain to client this is not possible through SAP standard & ask them to raise this issue with SAP support team.
Ur's Mohan