Revised HRA Rates from July 2023: The Railway Ministry has received a memorandum from IRTSA, urging the Secretary of Expenditure to review and adjust the rates for X, Y, and Z class cities to 27%, 18%, and 9% respectively. This adjustment should take effect starting from January 1st, 2021, as the rates of DA have surpassed 25%.
One of the significant components of Central Government employees’ salaries is the House Rent Allowance (HRA). It serves to provide compensation for rental housing expenditures, with a certain percentage of the basic salary being made available to all Central Government employees. The HRA rates are divided into three categories, namely Z Class, Y Class, and X Class, with revised percentages of 9%, 18%, and 27%, respectively, that took effect from July 1, 2021.
The Central Government personnel are expected to have the revised HRA rates in effect starting from January 1, 2021. Various employee unions are requesting the implementation of these revised rates from the same date.
How to calculate HRA in salary?
Most organizations, including both government and private sectors, allocate a specific portion of an employee’s basic salary to cover housing expenses. The percentage of Housing Rent Allowance (HRA) is determined according to the categorization of various cities and towns. The HRA value is derived based on an employee’s basic salary, such as when an individual receives Rs. 49000 as their basic salary, the HRA amount is calculated using the following percentages: 27% of basic salary which equals to Rs. 13230, 18% of basic salary which equals to Rs. 8820, or 9% of basic salary which equals to Rs. 4410.
HRA Hike for Central Government Employees
28% DA Hike Impact On The Rate of HRA for CG Employees: On August 18, 2021, orders were issued to revise the House Rent Allowance (HRA) rates for cities in X Class, Y Class, and Z Class. The new rates are set at 27%, 18%, and 9%, respectively, and were effective as of July 1, 2021.
HRA Increase Order July 2021
The House Rent Allowance (HRA) will be revised for Central Government employees from 1st July 2021
Following the Cabinet’s approval, the existing rate of 17% for DA has been increased by 11% resulting in a new cumulative DA of 28% effective from 1st July 2021. This increase in DA is also affecting the rate of HRA. According to the 7th pay commission report, HRA rates for X, Y and Z class cities will be adjusted to 27%, 18% and 9% respectively when DA crosses 25%, and later adjusted to 30%, 20% and 10% respectively when DA crosses 50%.
Will HRA be revised to 27%, 18%, and 9% from July 2021?
As of July 2021, all groups of Central Government employees will see adjustments made to their HRA percentages with revised rates of 27%, 18%, and 9% being implemented.
Benefits of House Rent Allowance
- A big relief on the expenditure of rented house
- If DA crosses 25% and 50%, HRA will increase!
- If the basic salary increases, HRA will increase!
New Rates of HRA from July 2021
- X Class Cities: 27 percent of Basic Pay
- Y Class Cities: 18 percent of Basic Pay
- Z Class Cities: 9 percent of Basic Pay
7th CPC House Rent Allowance 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%).
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 the 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
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 pay level 3.
HRA Calculation with minimum pay of all levels in 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 pay level 1, pay level 2, and pay level 3.
7th Pay Commission New HRA Table
HRA for Pay Level 1
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 |
HRA for Pay Level 2
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 |
HRA for Pay Level 3
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%.
Double HRA Rules for Central Government Employees
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.
House Rent Allowance (HRA) is 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 denoted 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
List of Classification of cities for HRA in Andhra Pradesh & Telangana
List of Classified ‘X’ City (24% HRA)
- Hyderabad (UA)
List of Classified ‘Y’ Cities (16% HRA)
- Vijayawada (UA)
- Warangal (UA)
- Greater Visakahapatnam (M.Corpn.)
- Guntur (UA)
- Nellore (UA)
List of Classification of cities for HRA in Assam
List of Classified ‘Y’ City (16% HRA)
- Guwahati (UA)
List of Classification of cities for HRA in Bihar
List of Classified ‘Y’ City (16% HRA)
- Patna (UA)
List of Classification of cities for HRA in Chandigarh
List of Classified ‘Y’ Cities (16% HRA)
- Chandigarh (UA)
- S.A.S. Nagar, Mohali*
List of Classification of cities for HRA in Chhattisgarh
List of Classified ‘Y’ Cities (16% HRA)
- Durg-Bhilai Nagar (UA)
- Raipur (UA)
List of Classification of cities for HRA in Delhi
List of Classified ‘X’ Cities (24% HRA)
- Delhi(UA)
List of Classification of cities for HRA in Gujarat
List of Classified ‘X’ Cities (24% HRA)
- Ahmadabad (UA)
Classified ‘Y’ Cities (16% HRA)
- Rajkot (UA)
- Jamnagar (UA)
- Bhavnagar (UA)
- Vadodara (UA)
- Surat (UA)
List of HRA Cities in Haryana
List of Classified ‘Y’ Cities (16% HRA)
- Faridabad* (M.Corpn.)
- Gurgaon* (UA)
List of Classification of cities for HRA in Jammu & Kashmir
List of Classified ‘Y’ Cities (16% HRA)
- Srinagar (UA)
- Jammu(UA)
List of Classification of cities for HRA in Jharkhand
List of Classified ‘Y’ Cities (16% HRA)
- Jamshedpur (UA)
- Dhanbad (UA)
- Ranchi (UA)
- Bokaro Steel City (UA)
List of Classification of cities for HRA in Karnataka
List of Classified ‘X’ Cities (24% HRA)
- Bangalore / Bengaluru (UA)
List of Classified ‘Y’ Cities (16% HRA)
- Belgaum (UA)
- Hubli-Dharwad (M.Corpn.)
- Mangalore (UA)
- Mysore (UA)
- Gulbarga (UA)
List of Classification of cities for HRA in Kerala
List of Classified ‘Y’ Cities (16% HRA)
- Kozhikode (UA)
- Kochi (UA)
- Thiruvananthapuram (UA)
- Thrissur (UA)
- Malappuram (UA)
- Kannur (UA)
- Kollam (UA)
List of Classification of cities for HRA in Madhya Pradesh
List of Classified ‘Y’ Cities (16% HRA)
- Gwalior (UA)
- Indore (UA)
- Bhopal (UA)
- Jabalpur (UA)
- Ujjain (M.Corpn.)
List of Classification of cities for HRA in Maharashtra
List of Classified ‘X’ Cities (24% HRA)
- Greater Mumbai (UA)
- Pune (UA)
List of 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-Vaghela (M.Corpn.)
- Sangli (UA)
List of Classification of cities for HRA in Odisha
List of Classified ‘Y’ Cities (16% HRA)
- Cuttack (UA)
- Bhubaneswar (UA)
- Raurkela (UA)
List of Classification of cities for HRA in Puducherry (Pondicherry)
Classified ‘Y’ Cities (16% HRA)
- Puducherry / Pondicherry (UA)
List of Classification of cities for HRA in Punjab
List of Classified ‘Y’ Cities (16% HRA)
- Amritsar (UA)
- Jalandhar (UA)
- Ludhiana (M.Coprn.)
List of HRA Cities in Rajasthan
List of Classified ‘Y’ Cities (16% HRA)
- Bikaner (M.Corpn.)
- Jaipur (M.Corpn.)
- Jodhpur (UA)
- Kota (M.Corpn.)
- Ajmer (UA)
List of Classification of cities for HRA in Tamil Nadu
List of Classified ‘X’ Cities (24% HRA)
- Chennai (UA)
Classified ‘Y’ Cities (16% HRA)
- Salem (UA)
- Tiruppur (UA)
- Coimbatore (UA)
- Tiruchirappalli (UA)
- Madurai (UA)
- Erode (UA)
List of Classification of cities for HRA in Uttar Pradesh
List of 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)
List of Classification of cities for HRA in Uttarakhand
List of Classified ‘Y’ Cities (16% HRA)
- Dehradun (UA)
List of Classification of cities for HRA in West Bengal
List of Classified ‘X’ Cities (24% HRA)
- Kolkata (UA)
List of 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: Based 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.
Also read: HRA Finmin Order 2017 PDF Download
HRA Exemption from Income Tax
HRA Exemption Calculation and Calculator
A salaried employee can avail of the benefit of exemption from Income 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. Click to calculate your HRA with our simple calculator.
NC JCM Staff Side Suggestion on House Rent Allowance
Important Government orders regarding HRA
- House Rent Allowance (HRA) to Armed Forces Personnel – MoD Orders dt. 11.10.2017
- Finance Ministry Orders on 7th CPC House Rent Allowance – 7.7.2017
- HRA Classification of Cities – Class X, Y and Z cities
- House Rent Allowance (HRA) : Report of the Committee on Allowances
- Additional HRA for NER, A&N, Lakshadweep and Ladakh
- Admissibility of HRA during Study Leave
- HRA Enhanced Pay Scales with Profit for 3 Levels
- 7th CPC HRA Calculator as per Cabinet Decision
House Rent Allowance (HRA) Online calculator
Simple Online HRA Calculator for CG Employees after 7th CPC: Click the below link and check your HRA Amount with the percentage. How to calculate House Rent Allowance (HRA) from Basic salary?
- Step 1: Select your pay matrix level
- Step 2: Select your basic salary of your level pay hierarchy
- Step 3: Select your admissible percentage of HRA
HRA Order 2019 PDF Download
- X Y Z Classification of Cities for HRA 2020 PDF Download
- HRA order regarding No Accommodation Certificate PDF
- 7th CPC HRA for Armed Forces Personnel PDF
- 7th CPC HRA to PBOR of CAPF, Assam Rifles and NSG PDF
- All India Services (Hosue Rent Allowance) Rules 1977 PDF
- DoE Order on 7th July 2017 on Granting of HRA to CG Employees PDF
HRA Order 2021 PDF Download
All Central Government employees and officers are expecting the order for revising the House Rent Allowance (HRA) as per the recommendations of the 7th pay commission. Following the hike of Dearness Allowance to 28% from July 2021, the rates of HRA also enhance to 9%, 18%, and 27% according to the classification of cities and towns. We expect the Department of Expenditure will issue appropriate orders soon!
7th Pay Commission HRA Table PDF Download
Pre-Revised Rates | Revised Rates | ||||||
Level | Basic Pay | 24% | 16% | 8% | 27% | 18% | 9% |
1 | 18000 | 4320 | 2880 | 1440 | 4860 | 3240 | 1620 |
2 | 19900 | 4776 | 3184 | 1592 | 5373 | 3582 | 1791 |
3 | 21700 | 5208 | 3472 | 1736 | 5859 | 3906 | 1953 |
4 | 25500 | 6120 | 4080 | 2040 | 6885 | 4590 | 2295 |
5 | 29200 | 7008 | 4672 | 2336 | 7884 | 5256 | 2628 |
6 | 35400 | 8496 | 5664 | 2832 | 9558 | 6372 | 3186 |
7 | 44900 | 10776 | 7184 | 3592 | 12123 | 8082 | 4041 |
8 | 47600 | 11424 | 7616 | 3808 | 12852 | 8568 | 4284 |
9 | 53100 | 12744 | 8496 | 4248 | 14337 | 9558 | 4779 |
10 | 56100 | 13464 | 8976 | 4488 | 15147 | 10098 | 5049 |