HRA will be revised to 27%,18% and 9% w.e.f July 2021

HRA will be revised to 27%,18% and 9% of Basic Pay in X, Y and Z cities w.e.f July 2021

The Union Cabinet approved a hike in Dearness Allowance (DA) and Dearness Relief (DR) given to central government employees from 17 percent to 28 percent with effect from July 1, 2021. House Rent Allowance & Transport Allowance allowance also get increase based on the DA percentage.

Central Government Employees have a number of allowances that are attached to their salaries. One of the important allowance for Government Employees is the House Rent Allowance (HRA) which is provided under the 7th Central Pay Commission (CPC) rules. Here are some very important facts about 7th Pay Commission allowance:

The HRA entitlement depends upon the city that the central government employee resides in. The government has classified cities/towns in three categories namely X, Y and Z. For all central government employees residing in X category city, the rate of HRA per month as a percentage of basic salary will be 24 per cent. For employees living in Y and Z categories the rate of HRA per month as a percentage of basic salary will be 16 per cent and 8 per cent respectively.

As per the 7th Pay Commission recommendation the admissibility of House Rent Allowance (HRA) shall be as under

The rates of HRA will not be less than Rs.5400, Rs. 3600 and 1800 at X, Y & Z class cities respectively.

Finance Ministry released the Office Memorandum No.2/5/2017-E.II(B) dated 7th July, 2017, in the said memorandum it has mentioned that HRA amount for all employees living in either of the X, Y and Z categories will also be subject to revision if the Dearness Allowance (DA) crosses 25 per cent as per the rules laid down in a government notification. If DA exceeds 25 per cent, the new HRA will become 27 per cent, 18 per cent and 9 per cent. This will further be increased to 30 per cent , 20 per cent and 10 per cent of your DA crosses 50 per cent.

Now DA crossed 25%, i.e Central Government hiked dearness allowance to 28% for Central Government Employees, as per the Finance Ministry OM dated 7th July 2017, HRA will become 27 per cent, 18 per cent and 9 per cent for Central Govt Employees.

Revised HRA