The Ministry of Finance's Department of Expenditure (DOE) recently released a new set of guidelines for the granting of House Rent Allowance (HRA) to Central Government Employees.
According to the 7th Pay Commission (7th CPC) recommendations accepted by the government, the HRA given to Central Government Employees is calculated based on the pay drawn at the designated Level in the pay Matrix. According to the revised regulations, Central Government Employees are not eligible for HRA in the following cases:
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if he or she shares a government residence allocated to another government employee
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If he or she resides in housing provided by a government agency—the Central Government, a State Government, an autonomous public undertaking, a nationalized bank, the Life Insurance Corporation of India, etc.—or a semi-governmental organization.
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Whether he or she lives in the housing that has been allocated to them by the Central Government, State Government, Autonomous Public Undertaking, or Semi-Governmental Organization like Municipality, Port Trust, etc., or if they live separately in housing that they have rented.
HRA Rate in Different City Categories:
The classification of cities for the purposes of HRA is based on the population of the area, as per the most recent Census report, according to the DOE's Office Memorandum of 30th December 2022. Following is a list of areas and HRA rates that are reasonable:
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According to the 7th CPC, the permissible rate of HRA for areas having a population of 50 lakh people or more is 24%.
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According to the 7th CPC, the permissible rate of HRA for places in the Y category (home to 5 to 50 lakh people) is 16%.
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According to the 7th CPC, the permissible rate of HRA for Z category areas (those with a population less 5 lacs) is 8%.
All Central Government civilian employees, civilian personnel paid from the Defence Services Estimates, and individuals working for the Indian Audit and Accounts Department must abide by the aforementioned directives.
