7th Pay Commission HRA allowances: As the Central government has implemented the 7th Pay Commission (CPC) from July 1, more than 48 lakh government employees will now benefit from their House Rent Allowance (HRA). These employees will now get HRA of Rs 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z category of cities respectively. The minimum HRA floor rate has been calculated on the basis of previous HRA rates which were 30%, 20%, 10% respectively for all the Levels. “As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA shall not be less than Rs 5,400, Rs 3,600 and Rs 1,800 for X, Y and Z category of cities respectively. This floor rate has been calculated @ 30%, 20% and 10% of the minimum pay of Rs 18,000,” the government said in a statement.
Those cities with population of 50 lakhs and above comes under X category, cities with population between 5 to 50 lakh are under Y and those wih less than 5 lakh are under Z category. Now, with the implementation of the 7th Pay Commission, the HRA percentage has been lowered to 24, 16 and 8 per cent for X, Y, Z category respectively.
However, the HRA percentage will now change to 27, 18 and 9 per cent if DA crosses 25 per cent and will be further raised to 30, 20 and 10 per cent if DA crosses 50 per cent, added the report. To protect the interests of central govternment employees at Level 1, 2, 3, the government has fixed the minimum HRA slabs.
With the recent modification in the HRA slabs, at least 106 to 157 per cent hike can be expected in the HRA calculation of central government employees at all three levels. The new HRA is effective from July 1 and will be visible in the July take home salaries of the government employees.
Read full text of 7th Pay Commission official statement on House Rent Allowance:
HRA is currently paid @ 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities. 7th CPC has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities. As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA shall not be less than ₹5400, ₹3600 and ₹1800 for X, Y and Z category of cities respectively. This floor rate has been calculated @ 30%, 20% and 10% of the minimum pay of ₹18000. This will benefit more than 7.5 lakh employees belonging to Levels 1 to 3.
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7th CPC had also recommended that HRA rates will be revised upwards in two phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the Government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will benefit all employees who do not reside in government accommodation and get HRA.