7th Pay Commission: The central government gave a number of Holi gifts to its employees on Thursday (March 7, 2024) evening as it increased the dearness allowance (DA) and dearness relief (DR) by four per cent, from 46 per cent to 50 per cent. Along with that, Centre also increased the income tax exemption limit for gratuity from Rs 20 lakh to Rs 25 lakh. Apart from these two major announcements, the government also increased the House Rent Allowance by 3 per cent, 2 per cent, and one per cent, respectively, for employees residing in different category cities in India.

After the jump, the HRA for central government employees residing in X category cities will be 30 per cent of their basic salary. Due to this increase in HRA, the government will have a burden of Rs 9,000 crore, it said. Know the increased HRA percentage for central government employees living in different cities.

7th Pay Commission: How will HRA of employees increase?

The HRA of a central government employee depends on the city in which they reside. Employees in X category cities get the highest HRA at 27 per cent. After the jump, they would get 30 per cent. The next category is Y, in which employees will get 18 per cent. After the recent hike, they will get 20 per cent. After this, Z category employees will get a one per cent hike, which will increase their HRA from nine per cent to 10.

#Cabinet has approved the decision to hike dearness allowance for central government employees and pensioners by 4 %.

▪️Now the #DA will reach to 50%.

▪️House Rent allowance will be increased. Now gratuity limit has reached to 25 lakh rupees – Union Minister @PiyushGoyal… pic.twitter.com/jRcmR88W5y

— All India Radio News (@airnewsalerts) March 7, 2024

7th Pay Commission: City categorisation for HRA

HRA Hike: In X category-

Delhi, Ahmedabad, Bengaluru, Mumbai, Pune, Chennai, and Kolkata have been kept in the X category. 

HRA Hike: In Y category-

The Y category has cities such as Patna, Lucknow, Visakhapatnam, Guntur, Vijayawada, Guwahati, Chandigarh, Raipur, Rajkot, Jamnagar, Vadodara, Surat, Faridabad, Ghaziabad, Gurgaon, Noida, Ranchi, Jammu, Srinagar, Gwalior, Indore, Bhopal, Jabalpur, Ujjain, Kolhapur, Aurangabad, Nagpur, Sangli, Solapur, Nashik, Nanded, Bhiwadi, Amravati, Cuttack, Bhubaneswar, Rourkela, Amritsar, Jalandhar, Ludhiana, Bikaner, Jaipur, Jodhpur, Kota, Ajmer, Moradabad, Meerut, Bareilly, Aligarh, Agra, Lucknow, Kanpur, Allahabad, Gorakhpur, Firozabad, Jhansi, Varanasi, and Saharanpur.

HRA Hike: In Z category-

Apart from the X and Y category cities, all other cities have been kept in the Z category. Employees working in these cities get HRA of 9 per cent of the basic pay.