After a long wait, now central government employees will get 28% Dearness Allowance (DA) of basic salary from July 1. The Centre has approved this proposal. Along with this, the house rent allowance (HRA) of the employees has also been increased, which means the August salary of the central government employees will now come with a double bonanza.
HRA increased along with DA
Along with the increase in dearness allowance, the government has also increased the house rent allowance of central government employees. According to the rules, HRA has been increased because dearness allowance has exceeded 25%. Therefore, the Centre has increased the house rent allowance to 27%.
The Department of Expenditure had issued an order on 7 July 2017, in which it said that when dearness allowance will exceed 25%, then HRA will also be revised. Since July 1, Dearness Allowance has increased to 28%, so it is necessary to revise HRA as well.
How much is the increase in House Rent Allowance
After the revision, the house rent allowance has been increased by 1-3 percent for different categories. For 'X' class cities, the HRA will be 27% of the basic pay. Similarly, it will be 18 per cent for 'Y' class cities and 9 per cent of the basic pay for 'Z' class cities. At present, it is 24 percent, 16 percent and 8 percent for all three classes.
HRA rules
The cities whose population is more than 50 lakh come under the 'X' category. Similarly, cities with population more than 5 lakh come under 'Y' category. And cities with a population of less than 5 lak come under the 'Z' category. The minimum HRA for all three categories will be Rs 5400, 3600 and Rs 1800.
According to the Department of Expenditure, when the dearness allowance reaches 50 percent, the maximum house rent allowance will increase to 30 percent.
How much hike in salary a Central government employee will get after DA hike?
Before the DA hike decision, Central government employees were getting a DA of 17 per cent of the Basic Pay. Now, after the 11 per cent hike, they will receive 28 per cent of the basic pay.
As per the recommendation of 7th Pay Commission, the Central government employees would receive the minimum basic pay of Rs 18,000 at the entry-level. When the DA rate was 17 per cent of basic pay, such central government employees were receiving the dearness allowance of Rs 3,060 and after the DA hike, they will get get dearness allowance of Rs 5,040. This will be equal to a significant increase in monthly take-home salary.
Accordingly, the pension of the pensioners will also be decided. Employees can calculate how much salary will increase after DA hike according to their basic pension.
Salary to increase in August
The minimum DA hike will be Rs 5040 and the minimum HRA hike will be Rs 1800 every month. That is, the salary coming in August will increase by Rs 6840 (5040 + 1800).