HRA hike | 7th Pay Commission news: Double benefit to central Govt employees, after DA, now HRA will increase by 27%! Double benefit to central employees, after DA, now HRA will increase by 27%!

New Delhi: The Modi government has recently announced to restore the withheld dearness allowance (DA) of central employees. Lakhs of central government employees and pensioners are waiting for the increased dearness allowance to be implemented. There is another good news for them regarding HRA (House Rent Allowance). The government has now also amended the HRA (House Rent Allowance) of central employees. According to the reports, from the month of August, the employees will get the increased HRA in their salary account. According to the government’s office memorandum, HRA has been increased due to dearness allowance being more than 25%.

HRA reportedly increased by 27%

The central government has increased the dearness allowance of its employees from 17% to 28%, while the house rent allowance has also reportedly increased to 27%. In fact, the Department of Expenditure is believed to have issued an order on 7 July 2017 stating that the HRA would also be revised when dearness allowance exceeds the 25% bracket. The dearness allowance of employees will be increased to 28% from July 1. It is clear from this that amendment in HRA is also fixed.

HRA varies from city to city

According to the order of the Ministry of Finance, central employees will get HRA on the basis of their city. Cities are divided into three categories – X, Y and Z. After the revision, the HRA for X category cities will be 27% of the basic pay. Similarly, HRA for Y category cities will be 18% of basic pay while for Z category cities it will be 9% of basic pay.

This is how HRA gets upgraded

If the population of a city crosses 5 lakhs then it gets upgraded from Z category to Y category. Hence, instead of 9%, employees will be eligible for 18% HRA. Cities with a population of more than 50 lakhs fall in the X category. The minimum house rent allowance for all the three categories will be Rs 5400, 3600 and Rs 1800 respectively. According to the Department of Expenditure, when the dearness allowance reaches 50%, the HRA for X, Y and Z cities will be reduced to 30%, 20% and 10%.