The dearness allowance (DA) for central government employees has been raised to 50%, and as per the recommendations of the 7th Pay Commission, the house rent allowance (HRA) will also be increased. The increase in HRA will be significant. If your basic salary is Rs. 35,000, you might wonder how much your HRA will increase. Let’s find out.
The central government has recently increased the Dearness Allowance (DA Hike) to 50% for employees, effective from January 1, 2024. Once the DA reaches 50%, other allowances, such as the house rent allowance (HRA), must be revised. The Center will increase other allowances as per the recommendations of the 7th Pay Commission. Central government employees, including HRA, are eagerly waiting for increased allowances.
The Department of Personnel and Training has made an announcement regarding which allowances will be revised in the wake of the DA increase. However, no specific orders have been issued regarding changes in HRA. The question arises as to whether the central government will issue a special order on the HRA increase. Experts say that no special orders are required, as the Union Finance Ministry released an office memorandum on July 7, 2017, that clarified the HRA amendment when the DA reaches 50%. HRA increase will be done directly.
For the calculation of HRA, cities are divided into three categories (X, Y, and Z) based on other factors, including census. According to the 7th Pay Commission, HRA has been given as 24%, 16%, and 8% for the respective cities from July 1. However, when DA was increased to 25%, HRA was increased to 27%, 18%, and 9%.
With the recent increase in DA to 50%, HRA will increase to 30%, 20%, and 10% city-wise. Therefore, a person with a basic salary of Rs.35,000 will receive the following HRA based on their city category:
- X category city: HRA of Rs.10,500 with 30% on a salary of Rs.35,000.
- Y category city: HRA of Rs.7,000 with 20%.
- Z category city: HRA of Rs.3,500 with 10%.
DA will be implemented on January 1, 2024, and HRA will be implemented in the same month. DA was included in the March salary, and HRA was also provided to many employees. Experts suggest that employees check their pay slips, and those who did not receive it may receive increased HRA with the salary of this April month.
