HRA Online Calculator 2023 after 7th CPC
House Rent Allowance (HRA) is a common component of the salary package in India. It is a type of allowance that helps employees to meet their rental expenses. HRA is tax-exempt up to a certain limit, which makes it an attractive component of the salary package. The amount of HRA that an employee is eligible for depends on various factors, including the employee’s salary, the city of residence, and the actual rent paid.
In India, the HRA amount is calculated as a percentage of the employee’s basic salary. The percentage varies depending on the city of residence, with higher percentages being offered for employees living in metro cities. The actual amount of HRA that an employee receives is also dependent on the actual rent paid, with the maximum amount being limited to the HRA percentage of the basic salary. It is important to note that to claim HRA, an employee must be paying rent for a residential property and must provide proof of rent payment to the employer.
What is the meaning of HRA?
HRA is given to employees by their employers as a portion of their salary to cover costs associated with rental housing. In order to be eligible for HRA exemption, one must reside in a rented house. HRA exemption falls under the jurisdiction of Section 10(13A) and Rule 2A of the Income Tax Act, 1961.
What is House Rent Allowance in Salary?
The HRA aids employees in covering the expenses of their living accommodations in the city where they work. While it is part of your salary, unlike your basic pay, a portion of the HRA is exempt from taxes under Section 10 (13A) of the IT Act of 1961, subject to specific conditions. Employers establish the amount of HRA given to an employee based on factors such as their salary structure, compensation level, and city of residence. You can consult with your employer to ensure that you receive the maximum amount of tax benefits that are allowed under the Income Tax Act.”
What is the current rates of HRA?
The HRA rates are subject to change according to the Dearness Allowance (DA) percentage. Currently, the rates proposed by the 6th Central Pay Commission offer 30% of basic pay + grade pay + military service pay + NPA for those living in Class X cities, 20% for Class Y cities and 10% for Class Z cities. However, once the DA crosses 25%, the HRA rates will be revised to 27%, 18% and 9% for X, Y, and Z class cities, respectively. Further revisions to 30%, 20%, and 10% will be made when DA crosses 50%.
What are the benefits of HRA for Govt Employees?
House Rent Allowance (HRA) is a crucial part of the compensation package for Central Government employees, covering rental housing costs. The HRA rates are divided into three categories – X, Y, and Z – based on the city’s classification. As of July 1st, 2021, HRA rates have been modified to 9% (Z Class), 18% (Y Class), and 27% (X Class) for respective cities. Employers allocate a portion of an employee’s basic salary towards this allowance, determined based on the city the employee is based in. Calculating HRA in salary is a simple process. Assuming a basic salary of Rs. 49000, the employee’s HRA would be 27% (Rs. 13230), 18% (Rs. 8820), and 9% (Rs. 4410), respectively.
When will increase HRA to 30 percent?
The revision of the House Rent Allowance (HRA) for Central Government Employees has already taken place on July 1, 2021. Another revision will occur in 2024 when the DA percentage mark of 50% has been reached. The HRA is set to be raised from 27 percent to 30 percent, but only under the condition that the dearness allowance increase reaches at least 50 percent. The Department of Personnel and Training has outlined that the HRA will become 30%, 20%, and 10% when the dearness allowance crosses 50%, as per a memorandum. When the DA surpasses 25%, the HRA will be increased to 27%, 18%, and 9% of Basic Pay in X, Y, and Z cities, followed by 30%, 20%, and 10% of Basic Pay in the same cities when the DA reaches 50%.
What is the minimum rate of HRA?
More than 7 lakh employees will benefit from the enhancement of the minimum HRA. The revised rates of HRA will not be less than Rs.5400 for X-class cities, Rs. 3600 for Y-class cities, and Rs. 1800 for Z-class cities. The minimum amount of HRA is Rs. 1,800, which is equal to 10% of the minimum basic pay.
Classification of Cities for HRA after 7th CPC
The classification of cities for HRA after the 7th Pay Commission is determined by the population record, with Indian cities being divided into three categories: X Cities, Y Cities, and Z Cities. The State-wise list of X, Y, and Z class cities can be found in the table below. For HRA purposes, X and Y class cities and towns are eligible for 24% and 16% HRA respectively, while other cities fall under the Z class.
In Andhra Pradesh and Telangana, Hyderabad is classified as an X city with a 24% HRA. Vijayawada, Warangal, Greater Visakahapatnam, Guntur, and Nellore are classified as Y cities with a 16% HRA. Guwahati is the only Y city in Assam, while Patna is the only Y city in Bihar.
Chandigarh and S.A.S. Nagar, Mohali are the only two cities in Chandigarh, both of which are classified as Y cities with a 16% HRA. Durg-Bhilai Nagar and Raipur are the two Y cities in Chhattisgarh.
Delhi is the only X city in Delhi, with a 24% HRA. Ahmedabad is the only X city in Gujarat, while Rajkot, Jamnagar, Bhavnagar, Vadodara, and Surat are Y cities with a 16% HRA. Faridabad and Gurgaon are Y cities with a 16% HRA in Haryana.
Srinagar and Jammu are Y cities with a 16% HRA in Jammu & Kashmir, while Jamshedpur, Dhanbad, Ranchi, and Bokaro Steel City are Y cities in Jharkhand.
Karnataka has Bangalore/Bengaluru as an X city with a 24% HRA. Belgaum, Hubli-Dharwad, Mangalore, Mysore, and Gulbarga are Y cities with a 16% HRA. Kozhikode, Kochi, Thiruvananthapuram, Thrissur, Malappuram, Kannur, and Kollam are Y cities in Kerala.
Gwalior, Indore, Bhopal, Jabalpur, and Ujjain are Y cities in Madhya Pradesh. Greater Mumbai and Pune are the only X cities in Maharashtra. The other cities, such as Amravati, Nagpur, Aurangabad, Nashik, Bhiwandi, Solapur, Kolhapur, Vasai–Virar City, Malegaon, Nanded-Vaghela, and Sangli are all classified as Y cities with a 16% HRA.
Cuttack, Bhubaneswar, and Raurkela are the Y cities in Odisha. Puducherry/Pondicherry is a Y city in Puducherry. Amritsar, Jalandhar, and Ludhiana are Y cities in Punjab.
Bikaner, Jaipur, Jodhpur, Kota, and Ajmer are Y cities in Rajasthan. Chennai is the only X city in Tamil Nadu, while Salem, Tiruppur, Coimbatore, Tiruchirappalli, Madurai, and Erode are Y cities with a 16% HRA.
Moradabad, Meerut, Ghaziabad, Aligarh, Agra, Bareilly, Lucknow, Kanpur, Allahabad, Gorakhpur, Varanasi, Saharanpur, Noida, Firozabad, and Jhansi are all Y cities in Uttar Pradesh. Dehradun is the only Y city in Uttarakhand. Kolkata is the only X city in West Bengal, while Asansol, Siliguri, and Durgapur are Y cities with a 16% HRA. Note that Saharanpur was classified as a Y class city with effect from June 2011.
HRA Exemption from Income Tax
Learn How to Calculate HRA Exemption from Income Tax: Are you a salaried employee looking to claim an exemption from Income Tax on your HRA (House Rent Allowance)? If so, you’re in luck! Under Income Tax Rules 10(13A) and Rule 2A, you can claim exemption on the least of the following:
– Actual HRA received in your salary
– 40% of your salary (Basic Pay + DA) for Non-Metros
– 50% of your salary (Basic Pay + DA) for Metros like Mumbai, Calcutta, Delhi, or Chennai
– Rent paid minus 10% of your salary
At the same time, if you’re living in your own house or not paying any rent, you won’t be eligible for the exemption on HRA. But don’t worry, our HRA Exemption Calculator will help you determine the exact amount of exemption you can claim. So, use our calculator and enjoy a tax-free income with HRA exemption.
7th Pay Commission New HRA Table
HRA Rates for Pay Matrix Level 1
| 7th Pay Commission Pay Matrix Level 1 (Grade Pay 1800) | ||||
| Index | Basic Pay | HRA 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (X Class Cities) |
| 1 | Rs. 18000 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 2 | Rs. 18500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 3 | Rs. 19100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 4 | Rs. 19700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 5 | Rs. 20300 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 6 | Rs. 20900 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 7 | Rs. 21500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 8 | Rs. 22100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
HRA Rates for Pay Matrix Level 2
| 7th Pay Commission Pay Matrix Level 2 (Grade Pay 1900) | ||||
| Index | Basic Pay | HRA 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (X Class Cities) |
| 1 | Rs. 19900 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 2 | Rs. 20500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 3 | Rs. 21100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 4 | Rs. 21700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 5 | Rs. 22400 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
HRA Rates for Pay Matrix Level 3
| 7th Pay Commission Pay Matrix Level 3 (Grade Pay 2000) | ||||
| Index | Basic Pay | HRA 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (X Class Cities) |
| 1 | Rs. 21700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
| 2 | Rs. 22400 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
Top Links: