There is another good news for central employees. After Diwali bonus and dearness allowance, employees can get another big gift. the Modi government at the Center may also increase the House Rent Allowance.
House rent allowance is given to government employees according to the city in which they are working. There are 3 categories in House Rent Allowance. In this, cities with population of more than 50 lakh come in ‘X’ category, those with more than 5 lakh in ‘Y’ category and those with less than 5 lakh in Z category.
Central Employees HRA Hike: There is another good news for central employees. After Diwali bonus and dearness allowance, employees can get another big gift. It is reported that after increasing the dearness allowance from 42 percent to 46 percent from July 1, 2023, the Modi government at the Center may also increase the House Rent Allowance. If this happens, there will be a big increase in the salaries of the employees. However, no official confirmation has been made by the government in this regard yet.
Increase in house rent allowance also possible
According to media reports, after the dearness allowance, the Modi government can now make the next revision in the house rent allowance also. There is a possibility that HRA may be increased by 3% in the new year. After this, the maximum HRA will increase from the existing rate of 27% to 30%. But this will happen only when DA exceeds 50%, because the house rent allowance of employees is revised according to DA. It is estimated that the government may take a decision on this before the 2024 Lok Sabha elections. According to the memorandum of the Finance Department, if DA crosses 50 percent, HRA will become 30%, 20% and 10%. This can increase the salary by more than 20 thousand.
3 categories of HRA
Actually, government employees are given house rent allowance according to the city in which they are working. There are 3 categories in House Rent Allowance. In this, cities with population of more than 50 lakh come in ‘X’ category. Cities with population more than 5 lakh come in ‘Y’ category. Cities with population less than 5 lakh come in ‘Z’ category. The minimum HRA for all three categories will be Rs 5400, 3600 and Rs 1800. Currently, X category employees are given 27 percent of their basic salary, Y category employees are given 18 to 20 percent and Rent allowance is being given.
What is house rent allowance?
HRA is actually an allowance given to the employee, the employer gives this allowance to his employee to pay the house rent, which is taxable. However, under Section 10(13A) of the Income Tax Act, tax exemption on HRA can be availed subject to certain limitations. A self-employed person does not get the benefit of tax exemption on HRA.
Dearness allowance increased to 46%, may reach 50% in 2024
It is noteworthy that recently the Modi government at the Center has increased the dearness allowance of central employees from 42% to 46%, which will be applicable from July 1, 2023. This will benefit 48.67 lakh employees and 67.95 lakh pensioners. The possibility of increase in House Rent Allowance has also increased, it is estimated that HRA may also be amended soon, before this HRA was increased last year in July 2021.
