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HRA Online Calculator 2023 after 7th CPC

The HRA (House Rent Allowance) is a standard feature in the salary packages of many Indian employees to cover rent expenses. This allowance is tax-exempt up to a specific threshold and is considered an attractive feature of the overall salary structure. The amount of HRA an employee receives is influenced by their salary, city of residence, and exact rental rate

In India, the HRA sum is determined based on a percentage of the employee’s basic pay, which varies by city – higher percentages are applied to those living in metropolitan regions. The actual HRA amount is calculated based on the actual rent paid, which should not surpass the HRA percentage of the basic salary. For an employee to qualify for HRA, they must provide proof of rental expenses and reside in a rented residential property.

What is the meaning of HRA?

Companies offer HRA as a component of their employees’ salary to help cover costs associated with renting a home. To qualify for HRA exemption, one must live in a rented dwelling. Section 10(13A) and Rule 2A of the Income Tax Act, 1961 governs the exemption for HRA.

What is House Rent Allowance in Salary?

The HRA serves as a means for employees to cover their living expenses in the city where they work. While it is considered to be a component of their salary, a part of the HRA can be excluded from taxes if specific circumstances are fulfilled as stated in Section 10 (13A) of the IT Act of 1961. The amount of HRA provided to employees is determined by their employer based on factors such as their compensation, salary structure, and place of residence. It is recommended to have a conversation with your employer to ensure that you receive the highest potential tax advantages permissible under the Income Tax Act.

What is the current rates of HRA?

The rates for the House Rent Allowance (HRA) may be altered depending on the Dearness Allowance (DA) percentage. As per the current plan proposed by the 6th Central Pay Commission, those who live in Class X cities can receive 30% of basic pay, grade pay, military service pay, and NPA, while those in Class Y and Z cities can receive 20% and 10%, respectively. However, if the DA surpasses 25%, the HRA rates will be modified to 27%, 18%, and 9% for X, Y, and Z class cities, respectively. Further modifications will be implemented when the DA exceeds 50%, to bring the rates back to their original percentages of 30%, 20%, and 10%.

What are the benefits of HRA for Govt Employees?

The House Rent Allowance (HRA) is a critical element of the compensation package for Central Government employees, which covers the costs of rental housing. HRA rates are classified into X, Y, and Z categories based on the city classification. As of July 1st, 2021, the corresponding HRA rates for these cities have been updated to 9% (Z Class), 18% (Y Class), and 27% (X Class). To determine an employee’s HRA, employers allocate a portion of the employee’s basic salary according to their location. Calculating HRA within the salary is a simple process. If an employee earns a basic salary of Rs. 49,000, their HRA would be Rs. 13,230 (27%), Rs. 8,820 (18%), and Rs. 4,410 (9%), depending on their city of residence.

When will increase HRA to 30 percent?

The House Rent Allowance (HRA) for Central Government employees was revised on July 1, 2021, and will undergo another revision in 2024 once the dearness allowance (DA) reaches a percentage of 50%. In the event that the DA increase reaches 50%, the HRA will be increased from 27% to 30%. According to a memorandum from the Department of Personnel and Training, the HRA will be set at 30%, 20%, and 10% respectively when the DA crosses 50%. Additionally, if the DA exceeds 25%, the HRA in X, Y, and Z cities will be increased to 27%, 18%, and 9% of Basic Pay. Once the DA reaches 50%, the HRA will be further increased to 30%, 20%, and 10% of Basic Pay in those cities.

What is the minimum rate of HRA?

The new minimum HRA rates will bring a positive change for more than 700,000 employees. The rates have been raised to a minimum of Rs. 5,400 in X-class cities, Rs. 3,600 in Y-class cities, and at least Rs. 1,800 in Z-class cities. It is worth mentioning that the minimum HRA amount has been set at Rs. 1,800, which is equal to 10% of the minimum basic pay.

Classification of Cities for HRA after 7th CPC

The 7th Pay Commission determines the classification of cities for HRA based on population records. Indian cities are segregated into three categories, namely X Cities, Y Cities, and Z Cities. State-wise classification of X, Y, and Z class cities are tabulated below. X and Y cities are entitled to 24% and 16% respectively, as HRA, while Z category cities are not eligible.

In Andhra Pradesh and Telangana, Hyderabad is an X city with 24% HRA, while Vijayawada, Warangal, Greater Visakahapatnam, Guntur, and Nellore belong to Y cities with 16% HRA. Patna and Guwahati are the only Y cities in Bihar and Assam respectively.

Chandigarh has only two cities, namely Chandigarh and S.A.S. Nagar, Mohali, both of which are Y cities with 16% HRA. Durg-Bhilai Nagar and Raipur are the two Y cities in Chhattisgarh. Delhi is the only X city in Delhi, while Ahmedabad is the only X city in Gujarat. Cities such as Rajkot, Jamnagar, Bhavnagar, Vadodara, and Surat belong in the Y category with 16% HRA. Faridabad and Gurgaon are Y cities in Haryana with 16% HRA.

Jammu & Kashmir has Srinagar and Jammu cities that belong in the Y category with 16% HRA, while Jamshedpur, Dhanbad, Ranchi, and Bokaro Steel City are Y cities in Jharkhand. Karnataka has Bangalore/Bengaluru in the X category with 24% HRA, and Belgaum, Hubli-Dharwad, Mangalore, Mysore, and Gulbarga in the Y category with 16% HRA.

Y cities in Kerala include Kozhikode, Kochi, Thiruvananthapuram, Thrissur, Malappuram, Kannur, and Kollam. Gwalior, Indore, Bhopal, Jabalpur, and Ujjain are Y cities in Madhya Pradesh, while Maharashtra has Greater Mumbai and Pune as X cities, and cities such as Amravati, Nagpur, Aurangabad, Nashik, Bhiwandi, Solapur, Kolhapur, Vasai–Virar City, Malegaon, Nanded-Vaghela, and Sangli as Y cities with 16% HRA.

Odisha has Cuttack, Bhubaneswar, and Raurkela belonging to the Y category, while Puducherry/Pondicherry is also a Y city. Amritsar, Jalandhar, and Ludhiana are Y cities in Punjab, and Bikaner, Jaipur, Jodhpur, Kota, and Ajmer are Y cities in Rajasthan. Tamil Nadu has Chennai in the X category, while Salem, Tiruppur, Coimbatore, Tiruchirappalli, Madurai, and Erode are Y cities with 16% HRA.

In Uttar Pradesh, cities such as Moradabad, Meerut, Ghaziabad, Aligarh, Agra, Bareilly, Lucknow, Kanpur, Allahabad, Gorakhpur, Varanasi, Saharanpur, Noida, Firozabad, and Jhansi are all Y cities. Dehradun is the only Y city in Uttarakhand. Kolkata is the only X city in West Bengal, while Asansol, Siliguri, and Durgapur belong in the Y category with 16% HRA. Please note that Saharanpur was reclassified as a Y city starting from June 2011.

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• Level 7 Pay Matrix 7th CPC | Level 7 Pay Matrix in Hand Salary
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HRA Exemption from Income Tax

Discover How to Compute HRA Exemptions for Income Tax: If you’re an employee receiving a salary and wish to assert an exemption on your HRA (House Rent Allowance) from Income Tax, you’re fortunate. According to Income Tax Regulations 10(13A) and Rule 2A, you may assert exemption on the lowest value of the following:
– Actual HRA received within your compensation
– 40% of your pay (Basic Pay + DA) for Non-Metros
– 50% of your pay (Basic Pay + DA) for Metros like Mumbai, Calcutta, Delhi, or Chennai
– Rent paid minus 10% of your salary
However, if you’re staying in your own home or paying no rent, you won’t be qualified for the HRA exemption. But there’s no need to be anxious as our HRA Exemption Calculator can help you establish the exact amount of exemption you can claim. Therefore, utilize our calculator now and relish a tax-free income with an HRA exemption.

7th Pay Commission New HRA Table

HRA Rates for Pay Matrix Level 1

HRA Rates for Pay Matrix Level 2

HRA Rates for Pay Matrix Level 3

Related topics:

• 18 Months DA for CG Employees News Latest Update 2023
• 7th DA Rates Table | Dearness Allowances Rates Table
• 8th Pay Commission DA Calculation

What is the minimum rate of HRA for government employees in India?

The minimum rate of HRA for government employees in India is Rs. 1620.

Is HRA applicable to all government employees in India?

Yes, HRA is applicable to all government employees in India.

How often is the HRA rate revised?

The HRA rate is revised annually by the government.