House Rent Allowance (HRA) Calculations after implementation of 7th CPC

House Rent Allowance (HRA) Calculations after implementation of 7^th CPC

The Union Cabinet finally cleared the 7^th Central Pay Commission for implementation on the 29^th of July 2016. The Report which recommended a hike in salaries and pension for employees and pensioners, will be implemented from 1^st January 2016. After taking into account dearness allowance at the prevailing rate, the salary, pension to all central government employees and pensioners will increase by at least 14.29 % as on January 2016, and could go up to 23 % in upper categories.

 The union cabinet approved the recommendations of the 7^th CPC on pay and pension but proposals for allowances was deferred and announced a committee under the finance secretary. The committee will analyse the allowances to be implemented or scraped. So the allowances like HRA, TA etc. will continue at existing rates for now.

 Regarding the HRA at present, it is 30 % for class X cities, 20% for Y cities, and 10% for Z class cities. However, in the 7^th CPC report it was recommended that the HRA should paid at the rate of 24%, 16% and 8% of the new basic pay for X, Y and Z category of cities respectively. The commission had recommended a rise in HRA when the DA crosses 50% to 27%, 18% and 9% and further increase to 30%, 20% and 10% when the DA crosses 100%.

 Now the allowances including HRA will be kept under the newly formed committee, there will be a huge confusion when calculating allowances including the HRA. On what basis will the HRA be calculated if the new recommendations are implemented?

 For example,

6th CPC Pay in the pay band	Grade Pay	Basic Pay	HRA @30%	7th CPC Basic pay	HRA @ 24%
Rs.13690	Rs.4200	Rs.17890	Rs.5367	Rs.46200	Rs.11088
Rs.10000	Rs.2000	Rs.12000	Rs.3600	Rs.30840	Rs.7464

Let us wait and see for the government orders regarding the calculations!!!!