House Rent Allowance Rules and Regulations – 7th CPC HRA – 7th Pay Commission HRA Rates – 7th CPC HRA Rules – HRA Exemption for Central Government employees

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.

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

Central Government Offices Holidays 2021

Kendriya Vidyalaya Admission Schedule 2021-22

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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