PayCalcHRA Rules for Central Government Employees
Which city class you are in decides your House Rent Allowance. The classification, the rates, the minimum floors and the DA-linked escalator — all in one place.
The three city classes
| Class | Criterion | HRA rate | Minimum HRA |
|---|---|---|---|
| X | Population 50 lakh+ (8 cities) | 27% | ₹5,400 |
| Y | Population 5–50 lakh (~90 cities) | 18% | ₹3,600 |
| Z | All other places | 9% | ₹1,800 |
X class cities: Delhi (NCR areas as notified), Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad. Y class includes most state capitals and large cities — Lucknow, Jaipur, Patna, Bhopal, Chandigarh, Guwahati, Indore, Nagpur, Coimbatore, Kochi, Visakhapatnam and others. Everything else is Z. The list derives from census population and is notified by the Department of Expenditure (DoE orders).
The DA-linked escalator
The 7th CPC set HRA initially at 24/16/8 (down from the 6th CPC's 30/20/10, because the base pay had grown 2.57×) with automatic restoration steps:
- DA crosses 25% → HRA becomes 27/18/9 (happened July 2021)
- DA crosses 50% → HRA becomes 30/20/10 (DA reached 50% in January 2024)
Departments implemented the 30/20/10 restoration per DoE orders; some establishments continued 27/18/9 pending clarification, which is why our HRA calculator defaults to the conservative 27/18/9 — edit as your office applies.
HRA and income tax
Under the old tax regime, Section 10(13A) exempts the least of: actual HRA received; rent paid minus 10% of salary (basic + DA); and 50% of salary in metros or 40% elsewhere. Under the new regime (the default for FY 2026-27), HRA is fully taxable — one reason employees paying high rent should compare regimes before filing (Income Tax Department).
Frequently asked questions
Which cities are X, Y and Z class?
X (population 50 lakh+): Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Ahmedabad. Y (5–50 lakh): about 90 cities including Lucknow, Jaipur, Patna, Bhopal, Chandigarh, Coimbatore, Indore, Nagpur. Z: everywhere else.
What if I live in government quarters?
You draw no HRA and instead pay a licence fee. If quarters are refused despite eligibility, HRA admissibility follows your department’s certificate rules.
Does HRA depend on actual rent paid?
No — for Central Government employees HRA is a flat percentage of basic pay by city class, regardless of rent. Rent matters only for the income-tax exemption under Section 10(13A) in the old regime.
How does city classification get updated?
The Ministry of Finance reclassifies cities after each census based on population. Employees in a reclassified city get the new rate from the notified date.
What will HRA be under the 8th CPC?
Unknown. Precedent suggests rationalised percentages on the larger new basic (the 7th CPC used 24/16/8 rising to 30/20/10 as DA crossed thresholds). The rupee amount typically still increases.