The Department of Expenditure, under the finance ministry, has updated the rules for claiming house rent allowance (HRA). There are three cases where government employees are not entitled to HRA.
The HRA will be provided to Central Government Employees and is calculated based on the pay drawn in the 7th Pay Commission (7th CPC) recommendations, which was accepted by the Government. The three conditions are as under:-
- If the government employee shares accommodation allotted to another government servant.
- Secondly, if the employee stays with his/her parents/son/daughter accommodation allocated by the Central Government, State Government, an Autonomous Public Undertaking or semi-Government Organization such as Municipality, Port Trust, Nationalised Banks, Life Insurance Corporation of India, etc.
- Finally, the government has laid the foundation that the government employee is not entitled to HRA if his/her spouse has been allotted accommodation at the same station by the Central Government, State Government, Autonomous Public Undertaking, or semi-Government organization.
The HRA allowance is a benefit provided to salaried individuals who live in rented houses to cover accommodation expenses. It is divided into three categories: X, Y, and Z.
- The category to which an individual belongs depends on the population of the area in which they live. The individuals living in areas with a population of 50 lakhs or more (category X) are given a rate of 24 percent.
- For individuals living in areas with a population between 5 lakhs and 50 lakhs (category Y), it is given at a rate of 16 percent.
- For individuals living in areas with a population below 5 lakhs (category Z), it is given at a rate of 8 percent.
The Department of Expenditure in its OM dated said, “The Department of Expenditure, Ministry of Finance has issued various instructions from time to time regarding grant of House Rent Allowance to Central Government employees.”
“Such instructions were issued a long back. Therefore, the existing instructions have been reviewed and in supersession of all earlier instructions issued on the subject, a consolidated master OM is hereby circulated for compliance by all Ministries/Departments”, the OM added.
