House Rent Allowance, or HRA, compensates Central Government employees who rent accommodation in the cities and towns where they are posted. Unlike DA, HRA is location-dependent: the rate varies by the population class of the city. With Dearness Allowance now at 60% (effective 1 January 2026), the upgraded slab of 30%/20%/10% for X, Y, Z cities is in force.
Current HRA rates
| City class | Population | HRA rate (current) | Earlier rate (DA < 25%) |
|---|---|---|---|
| X | 50 lakh and above | 30% of basic pay | 24% |
| Y | 5 lakh to less than 50 lakh | 20% of basic pay | 16% |
| Z | Below 5 lakh | 10% of basic pay | 8% |
The current rates apply automatically because DA has crossed the 50% threshold (per the 7th CPC slab structure: 24/16/8 below DA 25%, 27/18/9 between DA 25% and 50%, 30/20/10 at DA 50% and above). With DA at 60% from January 2026, employees are entitled to HRA at the upgraded slab.
City classification
City classification for HRA is based on the latest population figures notified by the Government. The list is updated periodically (usually following each Census). Some commonly classified cities:
X-class cities (30% HRA)
Delhi (NCT), Mumbai (UA), Kolkata (UA), Chennai (UA), Hyderabad (UA), Bengaluru (UA), Ahmedabad (UA), Pune (UA), Surat (UA). Where applicable, the urban agglomeration boundary is the reckoning unit, not the municipal limit alone.
Y-class cities (20% HRA)
State capitals and large cities below 50 lakh: Lucknow, Jaipur, Kanpur, Nagpur, Indore, Bhopal, Patna, Vadodara, Coimbatore, Chandigarh, Visakhapatnam, Vijayawada, Madurai, Thiruvananthapuram, Bhubaneswar, Guwahati, Raipur, Ranchi, Dehradun, Srinagar, Jammu, Faridabad, Ghaziabad, Noida, Allahabad, Varanasi, Agra, Meerut, and others as per the notified list.
Z-class (10% HRA)
All other cities and towns below 5 lakh population. This is the default for the bulk of district headquarters and smaller towns.
Worked example
An employee at Level 7 with basic pay Rs. 44,900, posted in Delhi (X city):
- HRA at 30%: 44,900 × 0.30 = Rs. 13,470 per month.
- If posted in Lucknow (Y city): 44,900 × 0.20 = Rs. 8,980 per month.
- If posted in a Z city: 44,900 × 0.10 = Rs. 4,490 per month.
Minimum HRA (the floor rule)
The 7th CPC introduced a minimum HRA rule: the actual HRA cannot fall below Rs. 5,400 (X), Rs. 3,600 (Y), or Rs. 1,800 (Z) per month, even if the percentage calculation produces a lower figure. This protects employees at the lowest pay levels in expensive cities. The minimum was raised proportionally with each DA-triggered upgrade. At the current 30/20/10 slab, the minimum HRA effectively becomes Rs. 5,400 (X), Rs. 3,600 (Y), and Rs. 1,800 (Z) at the lowest levels because the 30% calculation on Level 1 basic (Rs. 18,000) gives Rs. 5,400, exactly meeting the floor.
Who cannot claim HRA
- Employees in Government accommodation. If allotted official quarters, the employee pays a notional licence fee and forfeits HRA.
- Employees sharing Government accommodation. If you share quarters allotted to a parent, spouse, son or daughter who is a Government employee, you cannot also claim HRA on top.
- Spouse drawing HRA. Where both spouses are Central Government employees and posted in the same city, the rule is that only one can claim HRA at a time, except in specific scenarios.
Documentation required
- Up to Rs. 3,000 per month: Self-declaration in the prescribed form.
- Above Rs. 3,000 per month: Rent receipts. PAN of the landlord required if monthly rent exceeds Rs. 8,333 (i.e. annual rent above Rs. 1 lakh).
- Joint family / parents: Some Departments accept HRA claims where rent is paid to parents, provided rent receipts and PAN are furnished and the parents declare the rental income in their own ITR.
HRA exemption under Income Tax Act
HRA enjoys a partial tax exemption under section 10(13A) of the Income Tax Act, computed as the least of three figures:
- The actual HRA received from the employer.
- 50% of basic + DA (for metro cities) or 40% of basic + DA (for non-metro cities).
- Actual rent paid less 10% of basic + DA.
The exemption applies only if the employee actually pays rent. If you live in your own house or in Government quarters, the entire HRA is taxable.
Worked exemption example
Employee in Delhi (metro), Level 7, basic Rs. 44,900, DA at 60% (Rs. 26,940), HRA at 30% (Rs. 13,470), actual rent paid Rs. 18,000 per month.
- (1) Actual HRA received: Rs. 13,470.
- (2) 50% of (basic + DA) = 50% of 71,840 = Rs. 35,920.
- (3) Rent paid − 10% of (basic + DA) = 18,000 − 7,184 = Rs. 10,816.
- Exempt amount = least of the three = Rs. 10,816.
- Taxable HRA = 13,470 − 10,816 = Rs. 2,654 per month.
HRA and remote postings
Employees posted to specific remote or hard areas may receive Special Compensatory Allowance, Tribal Area Allowance, or similar location allowances over and above HRA. These are notified separately and have their own eligibility rules.
Frequently asked questions
Will HRA percentage change under the 8th CPC?
The 7th CPC reduced HRA from the 6th CPC level of 30/20/10 to 24/16/8 with a step-up rule. The 8th CPC may revisit this. Until the Commission recommends and the Cabinet approves a change, the current 30/20/10 (because DA > 50%) continues to apply.
Can I claim HRA while staying with my parents?
Yes, provided you actually pay rent to your parents, take rent receipts, and your parents declare the rental income in their ITR. Without these, the claim is treated as collusive and disallowed.
Does HRA stop during long leave?
HRA continues during earned leave, half pay leave, and commuted leave taken at the same headquarters. It also continues during leave for medical treatment in another station, subject to certain limits. It is not paid during EOL (Extraordinary Leave without pay).
Sources
- 7th CPC Report, Chapter 8.7 (House Rent Allowance), https://doe.gov.in.
- Department of Expenditure OM No. 2/4/2022-E.II(B), dated 7 July 2017 (HRA rates and step-up rule).
- Department of Expenditure OM dated 12 July 2024 (HRA upgrade triggered by DA crossing 50%).
- Income Tax Act, 1961, section 10(13A) and Rule 2A.
- City classification list as last notified by Department of Expenditure.