Finally On January 16, 2025, the Modi cabinet gave the green light to establish the 8th Pay Commission, which will look into salary adjustments for around 50 lakh central government workers and allowances for 65 lakh pensioners. This new commission is also set to provide suggestions regarding house rent allowance (HRA) for these employees. Here’s a quick overview of the HRA percentages recommended by the 7th Pay Commission and the subsequent cabinet approval.
7th Pay Commission HRA Breakdown
When the 7th Pay Commission’s recommendations were put into action regarding House Rent Allowance (HRA) for Central Government employees, the eligibility for HRA was categorized based on city classifications:
City Classifications: X, Y, Z
Monthly HRA as a percentage of Basic Pay: 24%, 16%, and 8% respectively.
According to the 7th Pay Commission, the minimum HRA rates are set at Rs. 5400, Rs. 3600, and Rs. 1800 for X, Y, and Z class cities, respectively. These rates will be adjusted to 27%, 18%, and 9% for X, Y, and Z class cities when the Dearness Allowance (DA) exceeds 25%, and further to 30%, 20%, and 10% when DA surpasses 50%.
7th Pay Commission HRA Special Provisions
There were special provisions allowing HRA at the Delhi (“X” class city) rates for Central Government employees stationed in Faridabad, Ghaziabad, NOIDA, and Gurgaon. Similarly, Jalandhar (“Y” class city) rates were applied to Jalandhar Cantt., while “Y” class city rates were also extended to Shillong, Goa, and Port Blair. Additionally, HRA equivalent to Chandigarh (“Y” class city) rates was granted to Panchkula and S.A.S. Nagar (Mohali).
These provisions took effect from July 1, 2017, and apply to all civilian employees of the Central Government, including those paid from the Defense Services Estimates.
