There is good news for Central government employees. After the announcement of the dearness allowance (DA) hike, now the Centre has also revised the house rent allowance (HRA) for the Central government employees. From August, the Central government employees will receive an increased HRA as per the revised rates.
Double bonanza for Central government employees
The Department of Expenditure had issued an order on 7 July 2017 stating that when the dearness allowance crosses 25 percent, the house rent allowance will be revised. Since July 1, the dearness allowance has been hiked to 28 percent, due to which the house rent allowance has also been revised.
How much is the increase in House Rent Allowance
After the revision, the house rent allowance has been increased by 1-3 percent for different categories. For 'X' class cities, the HRA will be 27% of the basic pay. Similarly, it will be 18 per cent for 'Y' class cities and 9 per cent of the basic pay for 'Z' class cities. At present, it is 24 percent, 16 percent and 8 percent for all three classes.
HRA rules
The cities whose population is more than 50 lakh come under the 'X' category. Similarly, cities with population more than 5 lakh come under 'Y' category. And cities with a population of less than 5 lak come under the 'Z' category. The minimum HRA for all three categories will be Rs 5400, 3600 and Rs 1800.
According to the Department of Expenditure, when the dearness allowance reaches 50 percent, the maximum house rent allowance will increase to 30 percent.
DA hike
Till now the central government employees were getting dearness allowance at the rate of 17 percent. But now, DA has been increased to 28 percent. The government had hiked the dearness allowance by 4 per cent in January 2020, 3 per cent in June 2020, and 4 per cent in January 2021. Going by these calculations, the total raise in DA will go up to 28 per cent (17+4 +3+4).
