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As urbanization is proliferating over the last few years there is an indispensable need for intelligent technology, digital surrounding, smart governance, and a sustainable environment to improve the quality of human life. As an outcome of the knowledge-based economy and accelerated development of technology Smart city is a combination of internet, network, sensors, etc. For implementing all the applications an emerging technology Internet of Things (IoT) acts as a backbone or one can say IoT is reaching urban living. The features and devices of smart cities are becoming smarter. The parameters like urban sustainability, infrastructure efficiency, and economic growth can be improved by the intervention of IoT. The aim of this chapter is to provide a comprehensive view of smart cities, its concepts, components and emergence. The table mentioned represents the established relationships between various sectors of industries and its services. Further in chapter the impact of smart cities on areas of science, technology, and society is illustrated. The focus is given to key applications, technologies and challenges related to IoT which are used in smart cities. The perceived concept of the smart city initiative will always remain critical for development and sustainability. The Future city is Smart and Economical.