7th CPC HRA
7th CPC House Rent Allowance for Central Govt Employees
Revised Rates of HRA 27%, 18% and 9% from 01.01.2021
The 7th Central Pay Commission (CPC) has recommended a new House Rent Allowance (HRA) structure for Central Government employees. The HRA rates will vary depending on the type of city in which the employee resides. Here are the details:
1. X Category Cities: The employees posted in X category cities will receive an HRA of 27% of their basic pay.
2. Y Category Cities: The employees posted in Y category cities will receive an HRA of 18% of their basic pay.
3. Z Category Cities: The employees posted in Z category cities will receive an HRA of 9% of their basic pay.
It is important to note that as per the recommendations of the 7th CPC, the HRA will be calculated based on the employee’s basic pay plus dearness allowance (DA). The resulting amount will then be used to calculate the HRA based on the above-mentioned percentages.
In addition, the 7th CPC has recommended that employees who live in government accommodation should not be eligible for HRA. However, if government accommodation is not available, or the employee chooses not to occupy it, they will be entitled to receive the HRA based on the rates mentioned above.
Rates of HRA shall be revised to 27%, 18% and 9% for X, Y & Z class cities w.e.f. 1st January 2021 – Finmin Orders 2021 [View Detail in Order PDF]
The rates of HRA will not be less than Rs. 5400/-, 3600/- & 1800/- at X, Y & Z class cities respectively. The rates of HRA will be revised to 27% 18% & 9% for X, Y & Z class cities respectively when Dearness Allowance (DA) crosses 25% and further revised to 30%, 20% & 10% when DA crosses 50%.
Compendium of Instructions regarding grant of House Rent Allowance to Central Government employees
The Department of Expenditure, Ministry of Finance has issued various instructions from time to time regarding grant of House Rent Allowance to Central Government employees. The existing instructions have been reviewed and in supersession of all earlier instructions issued on the subject, a consolidated Master O.M. is hereby circulated for compliance by all Ministries/ Departments. [HRA Rules for Central Government Employees in detail PDF]
Allowances Applicable to Central Government Employees
Children Education Allowance, Risk Allowance, Night Duty Allowance, Over Time Allowance, Special Allowance and Special Allowance for Child Care for Women with Disabilities are payable to Central Government Employees – [Dopt Orders 2022 PDF]
House Rent Allowance or HRA is one of the major salary elements for Central Government employees. The Cabinet Committee chaired by the Hon’ble Prime Minister Shri Narendra Modi has approved increase the Dearness Allowance to Central Government employees and Dearness Relief to pensioners with effect from 01.07.2021 to 28% to 31% representing an increase of 11% + 3% over the existing rate of 17% of the Basic Pay/Pension.
The rates of HRA will not be less than Rs. 5400/-, 3600/- & 1800/- at X, Y & Z class cities respectively. The rates of HRA will be revised to 27% 18% & 9% for X, Y & Z class cities respectively when Dearness Allowance (DA) crosses 25% and further revised to 30%, 20% & 10% when DA crosses 50%.
House Rent Allowance (HRA) for CG Employees as per 7th CPC
The 6th CPC recommended 10 percent of the basic salary (Pay) for employees working in other cities. And now the 7th pay commission recommended 8% of matrix pay for other cities. But the minimum amount of HRA is Rs. 1,800 (The minimum basic pay is Rs. 18,000 and the minimum HRA is equal to 10%).
The Government of India issued an important order regarding the rates and entitlements of House Rent Allowance for Central Government employees on 7.7.2017 as per the decision on 7th pay commission report. The new revised rates (percentage) of HRA as per city classification with effect from 1st July 2021 as follows…
- X Class Cities: 27 percent of Basic Pay
- Y Class Cities: 18 percent of Basic Pay
- Z Class Cities: 9 percent of Basic Pay
HRA Rules for Central Government Employees
Indian cities are classified according to the population for the purpose of House Rent Allowance (HRA) to Central Government Employees:
- X Class Cities (Above 50 Lakh Population): 27% of Basic Salary
- Y Class Cities (5 to 50 Lakh Population): 18% of Basic Salary
- Z Class Cities (Below 5 Lakh Population): 9% of Basic Salary
HRA Calculation with minimum pay of all levels in 7th CPC Pay Matrix
The revised rates of HRA will not be less than Rs.5400 for X Class cities, Rs. 3600 for Y-class cities, and Rs. 1800 for Z-class cities. The below table denotes the minimum amount of HRA for pay level 1, pay level 2, and pay level 3.
| Pay Matrix Level | Minimum Basic Salary (Pay) | HRA 27% | HRA 18% | HRA 9% |
| Pay Level 1 | Rs. 18000 | Rs. 5400 | Rs. 3600 | Rs. 1800 |
| Pay Level 2 | Rs. 19900 | Rs. 5400 | Rs. 3600 | Rs. 1800 |
| Pay Level 3 | Rs. 21700 | Rs. 5400 | Rs. 3600 | Rs. 1800 |
More than 7 lakh employees are benefiting due to the enhancement of minimum HRA and the table shows the basic pay in the pay level of 1, pay level 2 and pay level 3.
| 7th CPC Pay Matrix Level 1 (Grade Pay 1800) | ||||
| Index | Basic Pay | HRA 9% (Z Class Cities) | HRA 18% (Y Class Cities) | HRA 27% (X Class Cities) |
| 1 | Rs. 18000 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 2 | Rs. 18500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 3 | Rs. 19100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 4 | Rs. 19700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 5 | Rs. 20300 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 6 | Rs. 20900 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 7 | Rs. 21500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 8 | Rs. 22100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 7th CPC Pay Matrix Level 2 (Grade Pay 1900) | ||||
| Index | Basic Pay | HRA 9% (Z Class Cities) | HRA 18% (Y Class Cities) | HRA 27% (X Class Cities) |
| 1 | Rs. 19900 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 2 | Rs. 20500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 3 | Rs. 21100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 4 | Rs. 21700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 5 | Rs. 22400 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 7th CPC Pay Matrix Level 3 (Grade Pay 2000) | ||||
| Index | Basic Pay | HRA 9% (Z Class Cities) | HRA 18% (Y Class Cities) | HRA 27% (X Class Cities) |
| 1 | Rs. 21700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 2 | Rs. 22400 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
How to calculate HRA in salary?
All organizations including government and private fixes a certain percentage of basic salary to the employees for the purpose of house rent expenses. The HRA percentage is fixed according to the classification of cities and towns. The amount of HRA is calculated as per the basic salary of an employee.
If an employee gets Rs. 48,000 as basic salary means, the HRA amount will be calculated as follows:
27% of basic salary: (48,000 x 27) /100 = 12,960
18% of basic salary: (48,000 x 18) /100 = 8640
9% of basic salary: (48,000 x 9) /100 = 4320
The House Rent Allowance (HRA) will be revised for Central Government employees from 1st July 2021
After the Cabinet approval on DA hike by 11% from the existing rate of 17%, the new cumulative DA has been enhanced to 28% from 1st July 2021. The hike of Dearness Allowance is also impacting the rate of House Rent Allowance (HRA). As per the 7th pay commission report, the rates of HRA will be revised to 27%, 18% and 9% for X, Y & Z class cities respectively when Dearness Allowance (DA) crosses 25 per cent and further revised to 30%, 20% and 10% when DA crosses 50%.
7th CPC Transport Allowance
*Minimum HRA of Rs. 5400, Rs. 3600 and Rs. 1800 for Class A, B, and C respectively. [Click here to view]
HRA will be revised to 30%, 20% & 10%
The rates of HRA will be revised to 27%, 18% and 9% for X, Y & Z class cities respectively when Dearness Allowance (DA) crosses 25 percent and further revised to 30%, 20% and 10% when DA crosses 50%.
Eligibility of HRA
The House Rent Allowance is admissible with reference to the place of office or duty. And it is not referenced with the residence of the employee.
CHECK ALSO: List of 7th Pay Commission Allowances
House Rent Allowance (HRA) is a compensation for expenses in connection with the rent of the residential accommodation to be hired or leased by the employee and is graded based on the level of the employee.
HRA Order 2021 PDF Download
All Central Government employees and officers are expecting the order for revising the House Rent Allowance (HRA) as per the recommendations of the 7th pay commission. Following the hike of Dearness Allowance to 28% from July 2021, the rates of HRA also enhance to 9%, 18%, and 27% according to the classification of cities and towns. The House rent Allowance is now paid at the rate of 24%, 16% and 8% for X,Y and Z cities. The rates of HRA will now be revised to 27%, 18% and 9% of Basic Pay in X,Y and Z cities since the Dearness Allowance (DA) crossed 25% level. We are expecting from the Ministry of finance, will issue the HRA order very soon.
Classification of Cities for HRA after 7th Pay Commission
Indian cities are classified as three categories (X Cities, Y Cities and Z Cities) for the purpose of House Rent Allowance as per the population record. The ‘X’ Class and ‘Y” Class cities and towns are denoting in the below table as State wise and the other cities are under ‘Z’ Class.
READ ALSO: 197 Seventh CPC Allowances-Government Gazette Notification issued on 6.7.2017
State-wise List of X Y Z Classification of Cities in India – Central Govt House Rent Allowance (HRA)
List of Classification of Cities for HRA in Andhra Pradesh & Telangana
Classified ‘X’ City (24% HRA)
- Hyderabad (UA)
Classified ‘Y’ Cities (16% HRA)
- Vijayawada (UA)
- Warangal (UA)
- Greater Visakahapatnam (M.Corpn.)
- Guntur (UA)
- Nellore (UA)
List of Classification of Cities for HRA in Assam
Classified ‘Y’ City (16% HRA)
- Guwahati (UA)
List of Classification of Cities for HRA in Bihar
Classified ‘Y’ City (16% HRA)
- Patna (UA)
List of Classification of Cities for HRA in Chandigarh
Classified ‘Y’ Cities (16% HRA)
- Chandigarh (UA)
- S.A.S. Nagar, Mohali*
List of Classification of Cities for HRA in Chhattisgarh
Classified ‘Y’ Cities (16% HRA)
- Durg-Bhilai Nagar (UA)
- Raipur (UA)
List of Classification of Cities for HRA in Delhi
Classified ‘X’ Cities (24% HRA)
- Delhi(UA)
List of Classification of Cities for HRA in Gujarat
Classified ‘X’ Cities (24% HRA)
- Ahmadabad (UA)
Classified ‘Y’ Cities (16% HRA)
- Rajkot (UA)
- Jamnagar (UA)
- Bhavnagar (UA)
- Vadodara (UA)
- Surat (UA)
List of Classification of Cities for HRA in Haryana
Classified ‘Y’ Cities (16% HRA)
- Faridabad* (M.Corpn.)
- Gurgaon* (UA)
List of Classification of Cities for HRA in Jammu & Kashmir
Classified ‘Y’ Cities (16% HRA)
- Srinagar (UA)
- Jammu(UA)
List of Classification of Cities for HRA in Jharkhand
Classified ‘Y’ Cities (16% HRA)
- Jamshedpur (UA)
- Dhanbad (UA)
- Ranchi (UA)
- Bokaro Steel City (UA)
List of Classification of Cities for HRA in Karnataka
Classified ‘X’ Cities (24% HRA)
- Bengalore / Bengaluru (UA)
Classified ‘Y’ Cities (16% HRA)
- Belgaum (UA)
- Hubli-Dharwad (M.Corpn.)
- Mangalore (UA)
- Mysore (UA)
- Gulbarga (UA)
List of Classification of Cities for HRA in Kerala
Classified ‘Y’ Cities (16% HRA)
- Kozhikoda (UA)
- Kochi (UA)
- Thiruvanathapuram (UA)
- Thrissur (UA)
- Malappuram (UA)
- Kannur (UA)
- Kollan (UA)
List of Classification of Cities for HRA in Madhya Pradesh
Classified ‘Y’ Cities (16% HRA)
- Gwalior (UA)
- Indore (UA)
- Bhopal (UA)
- Jabalpur (UA)
- Ujjain (M.Corpn.)
List of Classification of Cities for HRA in Maharashtra
Classified ‘X’ Cities (24% HRA)
- Greater Mumbai (UA)
- Pune (UA)
Classified ‘Y’ Cities (16% HRA)
- Amravati (M.Corpn.)
- Nagpur (UA)
- Aurangabad (UA)
- Nashik (UA)
- Bhiwandi (UA)
- Solapur (M.Corpn.)
- Kolhapur (UA)
- Vasai–Virar City (M.Corpn.)
- Malegaon (UA)
- Nanded-waghala (M.Corpn.)
- Sangli (UA)
List of Classification of Cities for HRA in Odisha
Classified ‘Y’ Cities (16% HRA)
- Cuttack (UA)
- Bhabaneswar (UA)
- Raurkela (UA)
List of Classification of Cities for HRA in Puducherry (Pondicherry)
Classified ‘Y’ Cities (16% HRA)
- Puducherry / Pondicherry (UA)
List of Classification of Cities for HRA in Punjab
Classified ‘Y’ Cities (16% HRA)
- Amritsar (UA)
- Jalandhar (UA)
- Ludhiana (M.Coprn.)
List of Classification of Cities for HRA in Rajasthan
Classified ‘Y’ Cities (16% HRA)
- Bikaner (M.Corpn.)
- Jaipur (M.Corpn.)
- Jodhpur (UA)
- Kota (M.Corpn.)
- Ajmer (UA)
List of Classification of Cities for HRA in Tamil Nadu
Classified ‘X’ Cities (24% HRA)
- Chennai (UA)
Classified ‘Y’ Cities (16% HRA)
- Salem (UA)
- Tiruppur (UA)
- Coimbatore (UA)
- Tiruchirappalli (UA)
- Madurai (UA)
- Erode (UA)
List of Classification of Cities for HRA in Uttar Pradesh
Classified ‘Y’ Cities (16% HRA)
- Moradabad (M.Corpn.)
- Meerut (UA)
- Ghaziabad* (UA)
- Aligarh (UA)
- Agra (UA)
- Bareilly (UA)
- Lucknow (UA)
- Kanpur (UA)
- Allahabad (UA)
- Gorakhpur (UA)
- Varanasi (UA)
- Saharanpur (M.Corpn.)
- Nodia* (CT)
- Firozabad (NPP)
- Jhansi (UA)
List of Classification of Cities for HRA in Uttarakhand
Classified ‘Y’ Cities (16% HRA)
- Dehradun (UA)
List of Classification of Cities for HRA in West Bengal
Classified ‘X’ Cities (24% HRA)
- Kolkata (UA)
Classified ‘Y’ Cities (16% HRA)
- Asansol (UA)
- Siliguri(UA)
- Durgapur (UA)
Note:
- S.A.S. Nagar, Mohali: Special sanction at par with Chandigarh
- Faridabad, Gurgaon, Ghaziabad, Noida: Base on dependency only for HRA
- Saharanpur: Classified as Y class with effect from June 2011
Which are classified Z cities in India?
Initially, the cities were classified as A B C and then categorized as X, Y and Z. The remaining cities and towns in India which are not covered by classification as X or Y are classified as Z class cities for the purpose of HRA to Central Government employees.
HRA Exemption for Central Government employees
HRA Exemption from Income Tax
HRA Exemption Calculation and Calculator
A salaried employee can avail the benefit of exemption from Income Tax from his HRA (House Rent Allowance). As per the Income Tax Rules 10(13A) & Rule 2A House Rent Allowance least of the following is exempt
- Actual HRA received in their salary slip
- 40% of Salary (Basic Pay + DA) for Non Metros
- 50% of Salary (Basic Pay + DA) for Metros (Mumbai, Calcutta, Delhi, Chennai)
- Rent paid minus 10% of salary
If an employee is living in his own house or he does not pay any rent, he is not eligible for the above said exemption on HRA.
Who is not entitled to HRA?
The employees who are residing in government accommodation are not an entitlement to HRA.
What is the meaning of Basic Pay?
The word of Basic Pay is used in the calculation purpose of HRA, does not include any type of pay like special pay, Non-Practising Allowance (NPA), Military Service Pay (MSP), etc.
Minimum HRA Rs. 1,800 at the rate of 10%
The revised rates of HRA will not be less than Rs.5400 for X Class cities, Rs. 3600 for Y Class cities and Rs. 1800 for Z class cities. The below table denotes the minimum amount of HRA for pay level 1, pay level 2 and for pay level 3.
What is the Current Rate of HRA for Central Govt Employees?
The House Rent Allowance will be 27% of the basic salary for the employees working in class X cities and 18% of basic salary for class Y cities and for others 9% w.e.f. 1st January 2021.
What is the minimum HRA for Central Govt Employees?
fter the implementation of the 7th Pay Commission, the House Rent Allowance (HRA) will be Rs. Rs. 5400, Rs. 3600, Rs. 1800 for X, Y and Z cities respectively.
Latest News on HRA:
- 7th Pay Commission Analysis and Recommendations on House Rent Allowance December 18, 2015Read more…
- 7th CPC recommendations to reduce House Rent Allowance November 23, 2015Read more…
- Seventh Pay Commission Report Chapter 8.7: Allowances related to Housing (CILQ,HRA, FAA, Family HRA, Hutting Allowance, Rent Free Accommodation, SNLQ) November 22, 2015Read more…
- HRA as per Census 2011 to Railway Employees – Orders issued October 2, 2015Read more…
- Denial of payment of HOUSE RENT ALLOWANCE, Transport Allowance etc. to trainees appointed on compassionate ground September 30, 2015Read more…
- Grant of 30% HRA to staff working Umdanagar, Medchal and Gundlapochampally on par with the staff working in GHMC limits September 22, 2015Read more…
- 7th Central Pay Commission proposes to increase HRA of Central Government employees September 15, 2015Read more…
- Revision of HRA for CPSE employees on the basis of Census – 2011 September 11, 2015Read more…
- Re-classification of Cities/Towns for the purpose of grant of HRA to CG Employees August 5, 2015Read more…
- Central Government employees – Finance Ministry issued orders on upgradation of cities / towns on the basis of Census 2011 for the purpose of House Rent Allowance July 23, 2015Read more…
- Grant 30 percent HRA for Medak (Yeddumailaram) Employees – National Council JCM (Staff Side) July 15, 2015Read more…
- House Rent Allowance is going to be hike for Bank Employees as per 2011 Census Report July 7, 2015Read more…
- Based on the Census Report of 2011 HRA and TA increased for Central Government employees June 5, 2015Read more…
- Revision of classification cities for the purpose of House Rent Allowance (HRA) and Transport Allowance (TA) to Central Government employees May 31, 2015Read more…
- 50% hike in the Fellowship amount to Young Research Scientists October 22, 2014Read more…
- Procedures for claiming HRA on Transfer with connection of Government Accommodation October 22, 2014Read more…