DA hiked to 50%: Now HRA of govt employees to go up as per 7th CPC

Dearness allowance (DA) of government employees increased to 50%. The revised DA will be effective retrospectively, from January 1, 2024. When DA touches 50%, certain allowances such as House Rent Allowance (HRA) are also revised. Now the central government employees are eagerly waiting for the other allowances to be modified.

The Department of Personnel and Training has already released a list of allowances that will be revised following the hike in DA this month. However, there has been no order yet regarding the change in HRA. Will the central government release a separate order mentioning the hike in HRA as DA reaches 50% now? How much will the hike be in HRA now? When can central government employees expect the increased HRA? ET Wealth Online answers these questions for you.

How much will HRA increase as DA touches 50% for central government employees?

First, let’s understand how a revision in DA will impact the HRA of central government employees. Sanjeev Kumar, Partner, Luthra and Luthra Law Offices India, says, “To understand the change in House Rent Allowance, we need to understand its calculation with its components which is paid to the central government employees. The HRA depends upon the type of city in which the employee resides.”

For HRA calculation, cities are categorised as type X, Y and Z based on Census, among other factors. According to the recommendations of the 7th Pay Commission, HRA has been rationalised to 24%, 16% and 8% of the basic pay for class X, Y, and Z cities, respectively, from July 1, 2017.