New Delhi: For lakhs of central government employees, awaiting the implementation of increased dearness allowance, here’s another piece of good news regarding HRA (House Rent Allowance). The government has now revised the HRA (House Rent Allowance) of central employees as well. If reports are to be believed, the employees will get an increase in HRA, deposited in their salary account from the month of August. According to the office memorandum of the government, the HRA has been increased because dearness allowance has exceeded 25 percent.
HRA purportedly raised to 27%
The Central Government has increased the dearness allowance of its employees from 17% to 28%, after this announcement, while it has also purportedly increased the house rent allowance to 27%. In fact, the Department of Expenditure is believed to have issued an order on 7 July 2017 in which it was said that when dearness allowance will exceed 25% bracket and hence the HRA will also be revised. Since July 1, the Dearness Allowance of the employees will be increased to 28%, which requires for a revision in the HRA as well.
HRA vary from city to city
According to the order of the Finance Ministry, central employees will get HRA on the basis of their city. The cities are divided into three categories – X, Y and Z. After revision, HRA for X category cities will be 27% of basic pay, similarly HRA for Y category cities will be 18% of basic pay while for Z category cities it will be 9% of basic pay.
If DA crosses 50%, then how much will be HRA?
If the population of a city crosses 5 lakhs then it gets upgraded from Z category to Y category. So, instead of 9%, employees will be eligible for 18% HRA. Cities where population is more than 50 lakh, fall in the X category. The minimum house rent allowance for all the three categories will be Rs 5400, 3600 and Rs 1800 respectively. According to the Department of Expenditure, when the dearness allowance reaches 50%, the HRA will be rendered to 30%, 20% and 10% for X, Y and Z cities.