HRA rules revised: Three cases where the employees are not eligible for HRA

House rent allowance is a benefit provided to salaried individuals who live in rented houses to cover accommodation expenses.

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The Department of Expenditure has revised the rules for HRA for central government employees under the 7th Pay Commission, stating that they will no longer be eligible for HRA in certain circumstances. This change has been made by the finance ministry, reported Financial Express. 

House rent allowance is a benefit provided to salaried individuals who live in rented houses to cover accommodation expenses. It is divided into three categories: X, Y, and Z. 

The category to which an individual belongs depends on the population of the area in which they live. According to the 7th Central Pay Commission (CPC), HRA for individuals living in areas with a population of 50 lakh or more (category X) is given at a rate of 24 per cent, for individuals living in areas with a population between 5 lakh and 50 lakh (category Y) it is given at a rate of 16 per cent, and for individuals living in areas with a population below 5 lakh (category Z) it is given at a rate of 8 per cent.

Reportedly, as per the revised rules for HRA, the dept. has mentioned three primary conditions where the employees won’t be eligible for getting HRA’s:

– If the individual shares a government-allocated accommodation with another government employee, or

– If the individual lives in an accommodation provided to their parents, children, or spouse by the central or state government, or an autonomous public organization (such as a municipality, port trust, nationalized bank, or Life Insurance Corporation of India), or

– If the individual’s spouse has been given an accommodation at the same location by the central or state government, or an autonomous public organization (such as a municipality, port trust), whether they live in the provided accommodation or in a separately rented accommodation.

According to the HRA rules, a government employee is entitled to receive house rent allowance based on their place of duty, regardless of where they are currently living. Also, those employees who do not own their own houses are eligible for HRA, even if they share government-allocated accommodation with other government employees, as long as they pay rent, contribute towards rent, or pay house or property taxes, regardless of the actual amount paid or contributed. This rule applies to all government employees, except those who live in their own houses.

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