Big news for 7th Pay Commission: No House Rent Allowance (HRA) allowed in these cases (Updated Rules)

7th Pay Commission Latest News 2023: The Department of Expenditure (DOE) under the Ministry of Finance recently released an updated compendium of instructions regarding the grant of House Rent Allowance (HRA) to Central Government Employees.

The HRA provided to Central Government Employees is calculated on the basis of the pay drawn in the prescribed Level in the pay Matrix as per the 7th Pay Commission (7th CPC) recommendations accepted by the Government. As per the updated rules, a Central Government Employee will not be entitled to HRA in the following cases:

  1. If he/she shares Government accommodation allotted to another Government servant
  2. If he/she resides in accommodation allotted to his/her parents/son/daughter by the Central Government, State Government, an Autonomous Public Undertaking or semi-Government Organization such as Municipality, Port Trust, Nationalized Banks, Life Insurance Corporation of India etc.
  3. If his/her spouse has been allotted accommodation at the same station by the Central Government/State Government/Autonomous Public Undertaking/Semi-Government Organization such as Municipality, Port Trust etc., whether he/she resides in that accommodation or he/she resides separately in accommodation rented by him/her.

HRA rate and classification of cities

According to the DOE’s Office Memorandum dated 30th December 2022, the classification of cities for the purpose of HRA is based on the population of the area, as per the latest Census report. The classification of area and HRA rate admissible is as follows:

  • X category (areas with a population of 50 lakhs and above): The admissible rate of HRA as per the 7th CPC is 24%.
  • Y category (areas with a population of 5 lakhs to 50 lakhs): The admissible rate of HRA as per the 7th CPC is 16%.
  • Z category (areas with a population below 5 lakhs): The admissible rate of HRA as per the 7th CPC is 8%.

The above instructions will apply to all civilian employees of the Central Government, civilian employees paid from the Defence Services Estimates and persons serving in the Indian Audit and Accounts Department.

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