Important Update For Government Employees: HRA Not Always Available Under 7th Pay Commission

PK DeskJanuary 8, 2023Last Updated: January 9, 2023

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The House Rent Allowance (HRA) for central government employees has been modified by the Department of Expenditure of the Finance Ministry. As per the latest update, certain central government employees may no longer be qualified for HRA.

HRA is acceptable in reference to the ‘site of duty’ of government employees, according to the HRA rules.

Specific caes in which employee will not receive HRA:

(i) An employee may not be entitled to receive HRA if they are living in government-provided housing with another government employee.

(ii) An employee may also not be eligible for HRA if they are residing in housing provided by the government, such as a state government or a semi-government organization like a nationalized bank or municipality.

(iii) If a central government employee has been assigned housing at their station by the government or a semi-government organization, whether they choose to reside in that housing or in a separate rental property, they may not be eligible for HRA.

“Government servants other than a government servant who is living in a house owned by him shall be eligible for HRA even if they share government accommodation allotted to other government servants…subject to the condition that they pay rent or contribute towards rent or house or property tax but without regard to the amount actually paid or contributed,” according to the rules.

(7th pay commission HRA update) HRA Divisions

HRA is intended for paid people who live in rental housing. It is separated into three sections: X, Y, and Z.

(i) The 7th Pay Commission has designated certain areas as “X” places, which are defined as having a population of 50 lakh or more. For these areas, HRA is set at a rate of 24%.

(ii) “Y” places, which have populations ranging from 5 to 50 lakh, are entitled to HRA at a rate of 16%.

(iii) “Z” places, which have a population of less than 5 lakh, are eligible for HRA at a rate of 8%.