HRA Online Calculator 2023 after 7th CPC
HRA is a usual aspect of the salary package in India that employees can benefit from. This allowance covers rental expenses and is tax-exempt up to a specific threshold, which makes it an appealing salary component. Various factors influence the amount of HRA eligible for employees, such as the city of residency, actual rent paid, and salary.
Cities with higher living standards usually offer a higher percentage of HRA according to the employee’s basic salary. Employees must provide evidence of rent payment and reside in a rented residential property to claim HRA, with the upper limit being the percentage of the basic salary.
What is the meaning of HRA?
Employers provide their employees with HRA as a part of their salary to assist with the expenses incurred during rental housing. To qualify for HRA exemption, one must dwell in a rented residence. HRA exemption is governed by Section 10(13A) and Rule 2A of the Income Tax Act, 1961.
What is House Rent Allowance in Salary?
The HRA can help workers with their living expenses in the city where they are employed. It is considered a part of their income, but only a portion of it is eligible for tax exemption under Section 10 (13A) of the IT Act of 1961, depending on certain circumstances. Employers decide how much HRA an employee is given based on factors like their pay structure, level of compensation, and place of residence. Make sure you talk to your employer to make sure you take full advantage of the tax benefits that are permitted by the Income Tax Act.
What is the current rates of HRA?
The HRA rates are not fixed and may change, depending on the Dearness Allowance percentage. Presently, individuals living in Class X cities may receive 30% of their basic pay + grade pay + military service pay + NPA. Those residing in Class Y and Z cities are entitled to 20% and 10% respectively. However, if the DA percentage surpasses 25%, the HRA rate will be altered to 27%, 18%, and 9% for X, Y, and Z class cities. If the DA crosses 50%, then HRA rates will further be increased to 30%, 20%, and 10%.
What are the benefits of HRA for Govt Employees?
The compensation package for Central Government employees includes House Rent Allowance (HRA) which covers rental housing costs. HRA rates are classified into three categories – X, Y, and Z – based on the city’s classification. Effective July 1st, 2021, the HRA rates for respective cities have been modified to 9% (Z Class), 18% (Y Class), and 27% (X Class). Employers determine the allocation of a portion of an employee’s basic salary towards this allowance based on the employee’s city of residence. Calculating HRA is a simple process where assuming a basic salary of Rs. 49000, the respective HRA amounts would be 27% (Rs. 13230), 18% (Rs. 8820), and 9% (Rs. 4410).
When will increase HRA to 30 percent?
The House Rent Allowance (HRA) for Central Government Employees underwent a revision on July 1, 2021, and will be revised again in 2024 when the DA percentage mark of 50% is reached. In the event that the dearness allowance increase reaches at least 50%, the HRA will be raised from 27 percent to 30 percent. According to a memorandum from the Department of Personnel and Training, the HRA will become 30%, 20%, and 10% when the dearness allowance crosses 50%. Additionally, if the DA surpasses 25%, the HRA will be increased to 27%, 18%, and 9% of Basic Pay in cities X, Y, and Z. Then, when the DA reaches 50%, the HRA will be raised to 30%, 20%, and 10% of Basic Pay in the same cities.
What is the minimum rate of HRA?
The increase in the minimum HRA will bring positive impact to over 700,000 workers. The updated HRA rates will not dip below Rs.5400 for X-class cities, Rs.3600 for Y-class cities, and Rs.1800 for Z-class cities. It is worth noting that the minimum HRA amount stands at Rs.1800 which is equivalent to 10% of the minimum basic pay.
Classification of Cities for HRA after 7th CPC
The growth of cities and towns determines the classification of cities for HRA after the 7th Pay Commission. Indian cities are divided into three categories: X, Y, and Z cities. You can find a State-wise list of X, Y, and Z class cities in the table below. For HRA purposes, X and Y class cities and towns are eligible for 24% and 16% HRA respectively, while Z class cities are not eligible.
- In Andhra Pradesh and Telangana, Hyderabad is an X class city with a 24% HRA. Vijayawada, Warangal, Greater Visakahapatnam, Guntur, and Nellore are Y cities with a 16% HRA. Guwahati is the only Y city in Assam, while Patna is the only Y city in Bihar.
- Chandigarh and S.A.S. Nagar, Mohali are the only two cities in Chandigarh, both of which are Y cities with a 16% HRA. Durg-Bhilai Nagar and Raipur are the two Y cities in Chhattisgarh.
- Delhi is an X city with a 24% HRA. Ahmedabad is an X city in Gujarat, while Rajkot, Jamnagar, Bhavnagar, Vadodara, and Surat are Y cities with a 16% HRA. Faridabad and Gurgaon are Y cities with a 16% HRA in Haryana.
- Srinagar and Jammu are Y cities with a 16% HRA in Jammu & Kashmir, while Jamshedpur, Dhanbad, Ranchi, and Bokaro Steel City are Y cities in Jharkhand.
- Karnataka has Bangalore/Bengaluru as an X city with a 24% HRA. Belgaum, Hubli-Dharwad, Mangalore, Mysore, and Gulbarga are Y cities with a 16% HRA. Kozhikode, Kochi, Thiruvananthapuram, Thrissur, Malappuram, Kannur, and Kollam are Y cities in Kerala.
- Gwalior, Indore, Bhopal, Jabalpur, and Ujjain are Y cities in Madhya Pradesh. Greater Mumbai and Pune are the only X cities in Maharashtra. The other cities, such as Amravati, Nagpur, Aurangabad, Nashik, Bhiwandi, Solapur, Kolhapur, Vasai–Virar City, Malegaon, Nanded-Vaghela, and Sangli are all classified as Y cities with a 16% HRA.
- Cuttack, Bhubaneswar, and Raurkela are the Y cities in Odisha. Puducherry/Pondicherry is a Y city in Puducherry. Amritsar, Jalandhar, and Ludhiana are Y cities in Punjab.
- Bikaner, Jaipur, Jodhpur, Kota, and Ajmer are Y cities in Rajasthan. Chennai is the only X city in Tamil Nadu, while Salem, Tiruppur, Coimbatore, Tiruchirappalli, Madurai, and Erode are Y cities with a 16% HRA.
- Moradabad, Meerut, Ghaziabad, Aligarh, Agra, Bareilly, Lucknow, Kanpur, Allahabad, Gorakhpur, Varanasi, Saharanpur, Noida, Firozabad, and Jhansi are all Y cities in Uttar Pradesh. Dehradun is the only Y city in Uttarakhand. Kolkata is the only X city in West Bengal, while Asansol, Siliguri, and Durgapur are Y cities with a 16% HRA. Please note that Saharanpur was classified as a Y class city with effect from June 2011 for HRA purposes.
HRA Exemption from Income Tax
Discover the process of determining HRA exemption from Income Tax by following these guidelines. If you’re a salaried individual seeking to claim HRA (House Rent Allowance) as an exemption from Income Tax, then you have a chance! According to Income Tax Rules 10(13A) and Rule 2A, you can receive an exemption on the minimum of any of the following amounts: actual HRA obtained in your salary, 40% of your salary (Basic Pay + DA) for Non-Metro areas, 50% of your salary (Basic Pay + DA) for cities like Mumbai, Calcutta, Delhi, or Chennai, or rent paid minus 10% of your salary. However, if you reside in your own residence or aren’t paying any rent, the HRA exemption will not apply to you. Never fear, though; our HRA Exemption Calculator is here to help you determine the precise amount of exemption you can assert. Employ our calculator and get pleasure from an income that’s free of taxes thanks to HRA exemption.
7th Pay Commission New HRA Table
HRA Rates for Pay Matrix Level 1
7th Pay Commission Pay Matrix Level 1 (Grade Pay 1800) | ||||
Index | Basic Pay | HRA 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (X Class Cities) |
1 | Rs. 18000 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
2 | Rs. 18500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
3 | Rs. 19100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
4 | Rs. 19700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
5 | Rs. 20300 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
6 | Rs. 20900 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
7 | Rs. 21500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
8 | Rs. 22100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
HRA Rates for Pay Matrix Level 2
7th Pay Commission Pay Matrix Level 2 (Grade Pay 1900) | ||||
Index | Basic Pay | HRA 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (X Class Cities) |
1 | Rs. 19900 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
2 | Rs. 20500 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
3 | Rs. 21100 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
4 | Rs. 21700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
5 | Rs. 22400 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
HRA Rates for Pay Matrix Level 3
7th Pay Commission Pay Matrix Level 3 (Grade Pay 2000) | ||||
Index | Basic Pay | HRA 8% (Z Class Cities) | HRA 16% (Y Class Cities) | HRA 24% (X Class Cities) |
1 | Rs. 21700 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
2 | Rs. 22400 | Rs. 1800 | Rs. 3600 | Rs. 5400 |
What is the House Rent Allowance (HRA) calculator?
HRA calculator is an online calculator designed to help government employees in India calculate their House Rent Allowance based on the current rates of HRA for 2023 after the 7th Central Pay Commission.
What is House Rent Allowance (HRA) in salary?
House Rent Allowance (HRA) is a component of salary paid to government employees in India by their respective employers. This allowance is intended to cover the cost of renting a house or other accommodation.
What are the current rates of HRA?
The current rates of HRA are between 10-50% depending on the city of residence. The exact rate depends on the classification of the city, i.e. X, Y, and Z.
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