7th Pay Commission recommendation for House Rent Allowance (HRA)
Presently, HRA is payable at the following rates:
| Population of Cities/Towns |
Class of Cities/Towns |
HRA rates as % of Basic Pay (including MSP and NPA) |
| 50 lakh and above | X | 30 |
| 50–5 lakh | Y | 20 |
| Below 5 lakh | Z | 10 |
There are a large number of demands for paying HRA as a percentage of (Basic Pay + DA), instead of as a percentage of Basic Pay alone, as at present. Representations have also been received regarding enhancement of percentage rates and having only two classifications of Metros and Non-metros (instead of the present classification of X, Y and Z cities).
7th Pay Commission recommended following rates after taking various considerations
| Population of Cities/Towns |
Class of Cities/Towns |
HRA rates as % of Basic Pay (including MSP and NPA) |
| 50 lakh and above | X | 24 |
| 50–5 lakh | Y | 6 |
| Below 5 lakh | Z | 8 |
HRA – DA crosses above 50%
| Population of Cities/Towns |
Class of Cities/Towns |
HRA rates as % of Basic Pay (including MSP and NPA) |
| 50 lakh and above | X | 27 |
| 50–5 lakh | Y | 18 |
| Below 5 lakh | Z | 9 |
HRA – DA crosses above 100%
| Population of Cities/Towns |
Class of Cities/Towns |
HRA rates as % of Basic Pay (including MSP and NPA) |
| 50 lakh and above | X | 30 |
| 50–5 lakh | Y | 20 |
| Below 5 lakh | Z | 10 |
Currently, in the case of those drawing either NPA or MSP or both, HRA is being paid as a percentage of Basic Pay+NPA or Basic Pay+MSP or Basic Pay+NPA+MSP respectively. HRA is a compensation for expenses in connection with the rent of the residential accommodation to be hired/leased by the employee and is graded based on the level of the employee, and therefore should be calculated as a percentage of Basic Pay only. Add-ons like NPA, MSP, etc. should not be included while working out HRA
