7th Pay Commission: After increasing DA by 50%, now HRA will increase for central government employees

7th Pay Commission: After increasing the dearness allowance to 50 percent, HRA will soon be increased for central employees. Last month, dearness allowance for central government employees was increased by 50% with retrospective effect from January 1, 2024. Now, as per the 7th Pay Commission guidelines, when DA touches 50%, several allowances like House Rent Allowance are given. (HRA) has been revised for government employees.

Now that the new salary is being deposited in the account, the Central Government employees are waiting for the other allowances to be revised and credited to their account.

Last month, the Department of Personnel and Training had released a list of allowances, which has been revised after the DA hike this month. However, till now government employees have not received any update regarding the change in HRA.

Now central government employees are asking whether the Center will issue a separate order mentioning the increase in HRA as DA has now reached 50%.

How much will HRA increase?

Speaking to Economic Times, Sanjeev Kumar, partner, Luthra & Luthra Law Offices India, said government employees need to understand the HRA calculation with its components, which is paid to them along with their salary. He further said that HRA depends on which city the employee lives in.

Central government employees should note that the HRA hike depends on the category of cities in which the employees are residing. Cities are generally classified as types X, Y and Z based on census data, among other factors. As per the recommendations of the 7th Pay Commission, HRA has been rationalized to 24%, 16% and 8% of the basic pay for Class X, Y and Z cities with effect from July 1, 2017, respectively.

Check HRA calculation according to city category

Later, when DA reached 25%, the HRA rates in cities X, Y and Z were revised to 27%, 18% and 9% of the basic pay.

A Central Government employee with a base salary of Rs 35,000 will get the revised HRA as follows:

1. a) For Type X city: 27% of Rs 35,000 = Rs 9,450
2. B) For Y type city: 18% of Rs 35,000 = Rs 6,300
3. c) For Type Z city: 9% of Rs 35,000 = Rs 3,150

As per the recommendations of the 7th Pay Commission, when DA reaches 50%, the rates of HRA are revised to 30%, 20% and 10% of the basic pay in cities X, Y and Z respectively.

A Central Government employee with a base salary of Rs 35,000 will get the revised HRA as follows:

1. a) For Type X city: 30% of Rs 35,000 = Rs 10,500
2. B) For Y type city: 20% of Rs 35,000 = Rs 7,000