HRA Rules Revised: Check, Whether You are Eligible for HRA Benefits or Not?
House Rent Allowance is a benefit provided to salaried individuals who live in rented homes in order to assist with rental costs or expenses.
HIGHLIGHTS:
- Finance Ministry, has revised the rules for claiming house rent allowance (HRA) benefits.
- Employees will be eligible for HRA in three conditions, divided into X, Y, and Z categories.
- Categories defined as per the area, where employees are living, populated with 50 lakh people.
- HRA is a benefit provided to salaried individuals who live in rented house.
- The Department has issued various instructions in due course regarding grant of house rent allowance.
HRA rules revised: Check, whether you are eligible for HRA benefits or not
The Department of Expenditure, under the Finance Ministry, has revised the rules for claiming house rent allowance (HRA) benefits for salaries under the 7th Pay Commission and stated that employees will not be eligible for HRA benefits in certain circumstances. The ministry identified three circumstances where government employees are not entitled to HRA.
The three conditions are as follows:-
- One, If the government employee shares accommodation allotted to another government servant.
- Secondly, the employee stays with his/her parents/son/daughter accommodation allocated by the Central Government, State Government, an Autonomous Public Undertaking or semi-Government Organization such as Municipality, Port Trust, Nationalized Banks, Life Insurance Corporation of India, etc.
- Finally, the government has laid the foundation that the government employee is not entitled to HRA as his/her spouse has been allotted accommodation at the same station by the Central Government, State Government, Autonomous Public Undertaking, or semi-Government organization.
As per the new rule, HRA is divided into three categories: X, Y, and Z. HRA allowance is a benefit provided to salaried individuals who live in rented houses to help with housing costs.
The three categories are as follows: –
- As per the category- X, HRA benefits will appliable and given at the rate of 24 percent in this category for individuals living in areas with a population of 50 lakhs or more.
- The category- Y, stated, HRA benefits will appliable and given at the rate of 16 percent in this category for individuals living in areas with a population between 5 lakhs and 50 lakhs.
- The category- Z, stated, HRA benefits will appliable and given at the rate of 8 percent in this category for individuals living in areas with a population below 5 lakhs.
In its “Official Memo“, the Department of Expenditure, Ministry of Finance stated, “The Department has issued various instructions on due courses regarding grant of house rent allowance to central government employees.”
In the Official Memo, further added, “Such instructions were issued a long ago. Therefore, the existing instructions have been reviewed and in supersession of all earlier instructions issued on the subject, a consolidated in master Official Memo is hereby circulated for compliance by all Ministries/Departments.”
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