The Central Government has decided to increase the rate of Dearness Allowance from 17% to 28% from 1st July 2021. When DA reaches 25% level, the DA indexed allowances like HRA will also to be increased to 27%,18% and 9% w.e.f July 2021 as per the Allowance Committee recommendation.
New Revised Rate of HRA after DA reached 25%
The House rent Allowance is now paid at the rate of 24%, 16% and 8% for X,Y and Z cities.
The rates of HRA will now be revised to 27%, 18% and 9% of Basic Pay in X,Y and Z cities since the Dearness Allowance (DA) crossed 25% level.
The 7th Pay Commission initially had recommended to revise the HRA at above rates when DA reaches 50% and further to 30%, 20% and 10% of Basic Pay in X, Y and Z cities when DA crosses 100%
Then the Allowance Committee constituted by Central Government made the following changes.
The recommendations of the 7th CPC was accepted by the Allowance Committee with the following modifications:
(i) HRA shall not be less than Rs.5,400 per month, Rs.3,600 per month and Rs.1,800 per month calculated @30% of minimum pay for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities.
(ii) HRA shall be revised to 27%, 18% and 9% of Basic Pay in X,Y and Z cities when Dearness Allowance (DA) crosses 25% and further to 30%, 20% and 10% of Basic Pay in X, Y and Z cities when DA crosses 50%.