7th Pay Commission: Great News for Employees! DA Hike Allows 3% Increase in HRA, leading to Increase in Salary

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7th pay commission News: From January 2024, when the dearness allowance increases, there will be a significant rise in House Rent Allowance (HRA) and it will be changed. Around 50 percent of the dearness allowance for government employees has been confirmed.

With the increase in Dearness Allowance (DA Hike), other allowances are also being increased.

After DA, it’s time for an increase in House Rent Allowance (HRA)

Currently, the Dearness Allowance is 46 percent. When it reaches 50 percent, the HRA will be revised. This happened in July 2021 when the HRA increased by 3 percent after the Dearness Allowance crossed 25 percent. The upper limit was raised from 24 percent to 27 percent. It is almost certain that the HRA will increase by 3 percent again. The next revision may happen by March 2023.

HRA will increase by 3 percent in all three categories

According to the Department of Personnel and Training (DoPT), the revision of House Rent Allowance for central employees is linked to the Dearness Allowance. The current rates for HRA in different city categories are: 27 percent for X category cities, 18 percent for Y category cities, and 9 percent for Z category cities. These rates have been applicable since July 1, 2021.

The government has issued a memorandum confirming that central employees will receive an increase in House Rent Allowance (HRA) after the announcement of the Dearness Allowance (DA) increase in January 2024. When the Dearness Allowance reaches 50 percent, there will be a fixed revision of 3 percent in HRA. Almost 50 percent of the Dearness Allowance for central employees has been confirmed.

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Dearness Allowance has reached 50 percent

The new AICPI index numbers for central employees are positive, reaching 139.1 points. This translates to a Dearness Allowance of 49.68 percent, which is then rounded up to 50 percent. Even if the index numbers for December 2023 decrease, it is still certain that the Dearness Allowance will reach 50 percent by 2024.

HRA will increase by 3 percent

The next revision in House Rent Allowance will be 3 percent. The maximum rate of HRA will increase from 27 percent to 30 percent when the Dearness Allowance reaches 50 percent. For X category employees, HRA will increase from 27 percent to 30 percent. For Y category employees, it will increase from 18 percent to 20 percent. For Z category employees, it will increase from 9 percent to 10 percent.

How is HRA decided?

X category cities have a population of more than 50 lakh. Central employees posted in these cities receive 27 percent HRA. In Y category cities, the HRA is 18 percent, and in Z category cities, it is 9 percent. HRA is revised along with the Dearness Allowance from time to time. The next revision will happen in 2024.

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