7th CPC House Rent Allowance for Central Government Employees
7th CPC HRA
House Rent Allowance or HRA is one of the major salary elements for Central Government employees. The 6th CPC recommended 10 percent of basic salary (Pay) for the 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%).
House Rent Allowance (HRA) for CG Employees as per 7th CPC
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 2017 as follows…
- X Class Cities: 24 percent of Basic Pay
- Y Class Cities: 16 percent of Basic Pay
- Z Class Cities: 8 percent of Basic Pay
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): 24% of Basic Salary
- Y Class Cities (5 to 50 Lakh Population): 16% of Basic Salary
- Z Class Cities (Below 5 Lakh Population): 8% of Basic Salary
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.
HRA Calculation with minimum pay of all levels in 7th CPC Pay Matrix
Pay Matrix Level | Minimum Basic Salary (Pay) | HRA 24% | HRA 16% | HRA 8% |
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 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (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 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (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 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (X Class Cities) |
1 | Rs. 21700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
2 | Rs. 22400 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
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.
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 Class Cities in India – Central Govt House Rent Allowance (HRA)
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)
Assam
Classified ‘Y’ City (16% HRA)
- Guwahati (UA)
Bihar
Classified ‘Y’ City (16% HRA)
- Patna (UA)
Chandigarh
Classified ‘Y’ Cities (16% HRA)
- Chandigarh (UA)
- S.A.S. Nagar, Mohali*
Chhattisgarh
Classified ‘Y’ Cities (16% HRA)
- Durg-Bhilai Nagar (UA)
- Raipur (UA)
Delhi
Classified ‘X’ Cities (24% HRA)
- Delhi(UA)
Gujarat
Classified ‘X’ Cities (24% HRA)
- Ahmadabad (UA)
Classified ‘Y’ Cities (16% HRA)
- Rajkot (UA)
- Jamnagar (UA)
- Bhavnagar (UA)
- Vadodara (UA)
- Surat (UA)
Haryana
Classified ‘Y’ Cities (16% HRA)
- Faridabad* (M.Corpn.)
- Gurgaon* (UA)
Jammu & Kashmir
Classified ‘Y’ Cities (16% HRA)
- Srinagar (UA)
- Jammu(UA)
Jharkhand
Classified ‘Y’ Cities (16% HRA)
- Jamshedpur (UA)
- Dhanbad (UA)
- Ranchi (UA)
- Bokaro Steel City (UA)
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)
Kerala
Classified ‘Y’ Cities (16% HRA)
- Kozhikoda (UA)
- Kochi (UA)
- Thiruvanathapuram (UA)
- Thrissur (UA)
- Malappuram (UA)
- Kannur (UA)
- Kollan (UA)
Madhya Pradesh
Classified ‘Y’ Cities (16% HRA)
- Gwalior (UA)
- Indore (UA)
- Bhopal (UA)
- Jabalpur (UA)
- Ujjain (M.Corpn.)
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)
Odisha
Classified ‘Y’ Cities (16% HRA)
- Cuttack (UA)
- Bhabaneswar (UA)
- Raurkela (UA)
Puducherry (Pondicherry)
Classified ‘Y’ Cities (16% HRA)
- Puducherry / Pondicherry (UA)
Punjab
Classified ‘Y’ Cities (16% HRA)
- Amritsar (UA)
- Jalandhar (UA)
- Ludhiana (M.Coprn.)
Rajasthan
Classified ‘Y’ Cities (16% HRA)
- Bikaner (M.Corpn.)
- Jaipur (M.Corpn.)
- Jodhpur (UA)
- Kota (M.Corpn.)
- Ajmer (UA)
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)
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)
Uttarakhand
Classified ‘Y’ Cities (16% HRA)
- Dehradun (UA)
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 from Income Tax
HRA Exemption Calculation and Calculator
A salaried employee can avail the benefit of exemption from Incoem 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.
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