Allowances for central government employees

Allowances are the amounts a central government employee receives over and above basic pay, to meet the cost of living, the conditions of duty and specific job-related expenses. About 100 are in force, under Ministry of Finance, Department of Expenditure Resolution No. 11-1/2016-IC dated 6 July 2017, which gave effect to the 7th Central Pay Commission recommendations from 1 July 2017. The three that reach almost everyone, dearness allowance, house rent allowance and transport allowance, together add 40% to 90% on top of basic pay.

The weight is the point. At the dearness allowance of 60% in force from 1 January 2026, an employee at Level 7 posted in Delhi draws about Rs. 46,000 in routine allowances against a basic pay of Rs. 44,900, so the gross is roughly double the figure in the pay matrix cell. Two employees on identical basic pay can take home amounts that differ by a third, entirely on where they are posted and what they are entitled to draw.

This is the hub for the allowance cluster on salary-calculator.in. It covers what separates an allowance from pay and from a reimbursement, the 7th CPC rationalisation and what the government changed in it, the allowances that reach the most employees, which department issues which order, the three revision behaviours, what allowances count for beyond themselves, when they stop, how they are taxed under the Income-tax Act, 2025, and the dearness relief that is their pension-side equivalent. Each allowance with its own article is summarised here and linked; the detail lives in the child page.

What counts as an allowance

An allowance is a recurring payment made over and above the pay drawn in the pay matrix level, and it is neither pay nor a reimbursement, though the boundary is blurred in three places. Basic pay is the cell figure in the pay matrix and is the base on which almost everything else is computed. An allowance sits on top of that base and, as a rule, feeds nothing else.

The first blurred boundary is the pay element that carries the word allowance in its name. Non-practising allowance, 20% of basic pay for a government doctor who gives up private practice, is reckoned as pay for dearness allowance and for pension, so a doctor’s dearness allowance is computed on basic pay plus non-practising allowance. Military Service Pay works the same way in the opposite direction: it is named as pay, is paid as a flat element up to the rank of Brigadier, and is reckoned for dearness allowance and pension but not for house rent allowance. Both are exceptions written into the orders, not a general principle.

The second is the reimbursement. Travelling allowance and the Leave Travel Concession reimburse a cost actually incurred, against a claim and a ticket, and pay nothing where no journey is made. Children education allowance is the opposite: it is a flat Rs. 2,812.50 a month a child, so a parent paying Rs. 500 a month in fees and a parent paying Rs. 5,000 a month draw the same amount.

The third is the conditional allowance, which is withdrawn when the condition it answers disappears. House rent allowance is not admissible to an employee in government accommodation, and transport allowance is not admissible to an employee provided with government transport. These are not deductions from pay; the entitlement itself never arises.

The 7th CPC allowance reform

The allowances an employee draws today are the product of a single rationalisation completed in 2017. The 7th Central Pay Commission, which submitted its report on 19 November 2015, devoted the whole of Chapter 8 to allowances. It examined 196 of them and applied a three-part test to each: whether the allowance should continue at all, whether the set of people covered was still appropriate, and whether it could be clubbed with allowances serving a similar purpose. At paragraph 8.2.6 it recommended abolishing 52 outright and subsuming 36 into an existing or a newly created allowance.

The counts in circulation differ, and the reason is the stage at which the tally was taken. The report’s own figures at paragraph 8.2.6 are 52 abolished and 36 subsumed out of the 196 compiled in Chapter 8. Paragraph 8.3 of the Committee on Allowances report reconciles the whole set at 197, being the 196 plus the Special Train Controllers’ Allowance the Commission proposed as new, and splits it as 53 abolished, 37 subsumed, 95 retained and rationalised, and 12 Railway allowances on which no recommendation was made. The press release of June 2016 quoted 51 and 37 and the Press Information Bureau release of 28 June 2017 quoted 53 and 37. These are classification differences at different stages, not a change of substance, and the government advertised the net effect in one figure: 197 allowances rationalised to 128.

Allowances were the one part of the 7th CPC package the Cabinet did not settle in 2016. It approved pay and pension on 29 June 2016 and, at paragraph 7 of the accepting Resolution, referred every allowance except dearness allowance to a separate Committee on Allowances. That committee was constituted by Department of Expenditure Office Memorandum dated 22 July 2016 under Finance Secretary and Secretary (Expenditure) Ashok Lavasa, with the secretaries of Home Affairs, Defence, Health and Family Welfare, Personnel and Training and Posts and the Chairman of the Railway Board as members. It was given four months, took nine, and reported to the Finance Minister on 27 April 2017.

The government did not accept the Commission wholesale. The Committee received demands on 79 allowances and recommended changes in 34 of them, split at paragraph 8.5 of its report as 12 among the abolished, 9 among the subsumed and 13 among the retained and rationalised. The Cabinet approved the package on 28 June 2017 with modifications in those 34 allowances. Twelve allowances recommended for abolition were retained, largely for the functional needs of the Railways, Posts and the scientific departments, and 3 recommended for subsuming kept a separate identity.

The package was notified by Resolution No. 11-1/2016-IC, published in the Gazette of India (Extraordinary) on 6 July 2017, with every revised allowance admissible from 1 July 2017. That date is why the house rent allowance and transport allowance orders carry July 2017 dates while the revised pay itself runs from 1 January 2016: employees drew 6th CPC allowance rates on 7th CPC pay for 18 months, and no arrears were paid on the gap. The annual cost of the allowances package was Rs. 30,748.23 crore, being the Commission’s own projection of Rs. 29,300 crore plus Rs. 1,448.23 crore for the government’s modifications.

The major allowances

The 15 allowances below reach the most employees. Each is governed by its own order under the parent Resolution No. 11-1/2016-IC of 6 July 2017, and each has its own article on this site.

Beyond these sits a long tail of smaller payments: the hard area allowance and the island special duty allowance for remote postings, the deputation (duty) allowance whose ceiling the 7th CPC raised by 2.25 times, the cash handling and treasury allowance at Rs. 700 or Rs. 1,000 a month by the physical cash disbursed, the dress allowance into which the Commission merged eight older allowances (clothing, initial equipment, kit maintenance, robe, robe maintenance, shoe, uniform and washing), and the overtime allowance, which was abolished for most categories and retained only where it is statutory or operationally essential.

Which department issues which allowance order

Two departments issue allowance orders, and which one signs depends on the subject rather than on the size of the allowance. The Department of Expenditure fixes the allowances that turn on pay, and the Department of Personnel and Training fixes the ones that turn on service conditions. The boundary is entry 23(a) of the Allocation of Business Rules, 1961, which carves the pay subjects out of the DoPT allocation and leaves them with the Department of Expenditure.

The Department of Expenditure orders come from its E.II(B) desk and carry file numbers in that form. Dearness allowance is revised by an Office Memorandum in the 1/1-of-year series, the current rate of 60% having been notified by No. 1/1(i)/2026-E.II(B) dated 22 April 2026. House rent allowance is Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 for the rates and No. 2/4/2022-E.II(B) dated 30 December 2022 for the entitlement conditions. Transport allowance is Office Memorandum No. 21/5/2017-E.II(B) dated 7 July 2017.

The Department of Personnel and Training issues the orders on children education allowance, the hostel subsidy and the Leave Travel Concession, from its establishment and personnel-policy desks. The consolidated instructions on education allowance are Office Memorandum No. A-27012/02/2017-Estt.(AL) dated 17 July 2018, and the 25% enhancement of 2024 is No. A-27012/01/2023-Pers.Policy(Allowance) dated 25 April 2024. Leave Travel Concession runs on the CCS (LTC) Rules, 1988, which are DoPT rules.

The practical use of the distinction is knowing where to look. An unexplained change in the transport allowance figure on a pay slip is a Department of Expenditure order; a change in what can be claimed for a child’s schooling is a DoPT one.

How allowances are revised

The 7th CPC sorted every retained allowance into one of three revision behaviours, and which one an allowance falls into decides how and when the amount changes.

Percentage-based allowances are set as a percentage of basic pay, so they rise automatically as basic pay grows through the annual increment and a pay revision, and they need no separate order at all. House rent allowance at 30%, 20% or 10%, non-practising allowance at 20% and special duty allowance are of this kind. An employee who earns an increment on 1 July sees the house rent allowance move in the same month.

Slab-based allowances are set as a fixed rupee amount and carry a built-in provision that the amount rises 25% each time dearness allowance rises a further 50% of basic pay. Children education allowance, the hostel subsidy, the cells of the risk and hardship matrix, the dress allowance and most field allowances are in this family. Between step-ups the rupee figure does not move at all, whatever happens to pay.

Dearness-allowance-indexed allowances already carry dearness allowance on top of them every month, so the 7th CPC gave them no separate escalator. Transport allowance is the example that matters: the Rs. 3,600 a month of a Level 7 employee in a higher-rate city is paid as Rs. 5,760 at a dearness allowance of 60%, and it moves twice a year with every dearness allowance revision.

Three revision factors were applied once, at the point of the 2017 changeover, and they explain why some allowances jumped and others fell. Allowances not indexed to dearness allowance were raised by a factor of 2.25, partially indexed ones by 1.5, and allowances paid as a percentage of pay were rationalised by a factor of 0.8. The last of the three is why house rent allowance was first cut: 30%, 20% and 10% multiplied by 0.8 gives the 24%, 16% and 8% at which Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 set the allowance, on the reasoning that the 2.57 fitment factor had already raised the base sharply.

The 25% step-up when dearness allowance rises 50%

The escalator is stated for the risk and hardship matrix at paragraph 8.10.66 of the 7th CPC report, which provides that the rates “will increase further by 25 percent each time DA rises by 50 percent”, and the same clause was written into the slab allowances generally. Dearness allowance on the revised pay structure was 0% on 1 January 2016 and reached 50% on 1 January 2024, so exactly one step-up has happened in the whole life of the 7th CPC structure. At 60% from 1 January 2026 the next one is still some way off, because it comes at 100%.

What the step-up produced on 1 January 2024 is visible in three places. Children Education Allowance rose from Rs. 2,250 to Rs. 2,812.50 a month a child, and the Hostel Subsidy from Rs. 6,750 to Rs. 8,437.50, both under Department of Personnel and Training Office Memorandum No. A-27012/01/2023-Pers.Policy(Allowance) dated 25 April 2024. In the risk and hardship matrix the RH-Max cell moved to Rs. 39,375 and Rs. 26,250 and the lowest cell, R3H3, to Rs. 1,500 and Rs. 1,250.

The entitlement is pre-authorised, but the departments still issue an order stating the new rupee figures, which is why the education allowance enhancement of 1 January 2024 was notified in April 2024 and paid with arrears. House rent allowance is the one case that needed no fresh rate order: paragraph 2 of Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 had already fixed the escalated percentages in advance, so departments acted on the dearness allowance notification alone. That paragraph provided for 27%, 18% and 9% when dearness allowance crosses 25%, which took effect from 1 July 2021 when the rate moved from a frozen 17% to 28%, and 30%, 20% and 10% when it crosses 50%, which took effect on 1 January 2024. Both triggers were government additions: the Commission had proposed the step-ups at dearness allowance of 50% and 100%, and the government moved them down to 25% and 50%.

The allowances in brief

• Dearness allowance is the inflation-neutralising percentage of basic pay paid to all employees, revised with effect from 1 January and 1 July each year against the All India Consumer Price Index for Industrial Workers. It is 60% from 1 January 2026, notified by Office Memorandum No. 1/1(i)/2026-E.II(B) dated 22 April 2026, and it is the largest single addition to pay.
• House rent allowance is 30%, 20% or 10% of basic pay in an X, Y or Z class city, with monthly floors of Rs. 5,400, Rs. 3,600 and Rs. 1,800. It is computed on basic pay alone, never on basic pay plus dearness allowance, and the city classification for HRA article lists which city falls in which class.
• Transport allowance is a fixed monthly amount by pay level, Rs. 1,350 or Rs. 900 for Levels 1 and 2, Rs. 3,600 or Rs. 1,800 for Levels 3 to 8 and Rs. 7,200 or Rs. 3,600 for Level 9 and above, the higher figure in 19 listed cities, with dearness allowance paid on top. It answers the daily commute and is not travelling allowance.
• Travelling allowance reimburses journeys on tour and on transfer, with the travel class set by pay level, a daily allowance for the halt, and the composite transfer grant on a move of station.
• Children education allowance is Rs. 2,812.50 a month a child for up to two children, doubled for a differently abled child at Rs. 5,625, paid as a flat amount rather than as a reimbursement of actual fees.
• Leave Travel Concession reimburses the fare for a home-town or all-India journey by the employee and family in four-year blocks under the CCS (LTC) Rules, 1988, and is leave-linked rather than duty-linked.
• Risk and hardship allowance is the 7th CPC’s single 10-cell matrix, from R3H3 at Rs. 1,500 and Rs. 1,250 a month to the RH-Max cell at Rs. 39,375 and Rs. 26,250, which subsumed dozens of separate field allowances into one graded structure.
• Nursing allowance is a flat monthly allowance for nursing staff, of the slab type that steps up with dearness allowance.
• Non-practising allowance is 20% of basic pay for a government doctor who gives up private practice, and is reckoned as pay for dearness allowance and pension but not for house rent allowance.
• Running allowance is the kilometreage-based pay of railway running staff, with a fixed pay element that counts for dearness allowance, house rent allowance and pension.
• Military Service Pay is the flat element for defence personnel up to the rank of Brigadier and equivalents, reckoned for dearness allowance and pension.

How allowances stack up on a pay slip

Allowances at the current dearness allowance of 60% equal or exceed basic pay for most employees, so the gross on a pay slip is roughly double the pay matrix cell. Take an employee at Level 7, entry cell Rs. 44,900, posted in Delhi, which is an X class city for house rent allowance and one of the 19 higher-rate cities for transport allowance.

The same three allowances on a lower level in a smaller town produce a different shape. An employee at Level 3, entry cell Rs. 21,700, in a Z class town outside the 19 transport allowance cities, draws Rs. 13,020 of dearness allowance, Rs. 2,170 of house rent allowance and Rs. 2,880 of transport allowance, which is Rs. 18,070 of allowances against Rs. 21,700 of basic pay, or about 83%, for a gross of Rs. 39,770.

The gap between the two is where the allowance framework does its real work. The Level 7 employee draws 103% of basic pay in allowances and the Level 3 employee 83%, and the whole difference is city class and the transport allowance slab, neither of which has anything to do with the work performed. An employee in an official residence draws no house rent allowance at all and has the accommodation instead. The take-home salary article builds the full slip with the deductions, where income tax first bites at a gross of about Rs. 1,06,250 a month.

What allowances count for beyond themselves

Almost no allowance counts for anything except itself, and the exceptions are short enough to list. Emoluments for pension under Rule 31 of the CCS (Pension) Rules, 2021 are the basic pay drawn in the pay matrix level immediately before retirement, and exclude dearness allowance and every other allowance. Emoluments for gratuity are wider by exactly one item: basic pay plus dearness allowance. So an employee drawing Rs. 46,000 a month in allowances carries none of it into the pension except through the separate dearness relief paid on the pension itself.

Retirement-savings contributions run on a third base. The employee contribution of 10% and the employer contribution of 14% under the National Pension System and the Unified Pension Scheme are computed on basic pay plus dearness allowance, and so is the family pension and the leave encashment at retirement. The General Provident Fund subscription is a minimum of 6% of emoluments under Rule 8 of the General Provident Fund (Central Services) Rules, 1960.

Two allowances break the pattern because the orders say so. Non-practising allowance is reckoned as pay for dearness allowance and for retirement benefits, so a doctor’s dearness allowance is computed on basic pay plus non-practising allowance and the allowance enters the pension emoluments. Military Service Pay is reckoned the same way for defence personnel. Neither counts for house rent allowance, because Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 defines basic pay for the allowance orders as the pay drawn in the prescribed level of the pay matrix and nothing more.

When an allowance stops

An allowance stops when the condition it answers stops, and each allowance has its own trigger rather than there being a general rule. House rent allowance is not admissible to an employee provided with government accommodation, and the entitlement turns on the place of duty rather than the place of residence: paragraph 3.1 of Office Memorandum No. 2/4/2022-E.II(B) dated 30 December 2022 states that the allowance is admissible with reference to the place of duty irrespective of where the employee lives. An employee living in a house they own draws the allowance in full.

Transport allowance carries the longest list of stopping conditions, set out in seven separate heads in Office Memorandum No. 21/5/2017-E.II(B) dated 7 July 2017. It is not admissible where government transport has been provided, and it is withdrawn for a calendar month wholly covered by leave, by tour, by training abroad, by deputation abroad or by suspension. The month is the unit, so a Level 7 employee in Chennai on earned leave from 3 March to 20 March draws the full Rs. 5,760 for March. Suspension is the single head not applied all-or-nothing by month: where a suspension covers only part of a calendar month, the allowance for that month is reduced proportionately.

Dearness allowance is the allowance with no independent stopping condition, because it follows pay. Where pay is paid, dearness allowance is paid on it, including on the subsistence allowance during suspension, and where pay stops, as during extraordinary leave without pay, dearness allowance stops with it.

How allowances are taxed

Allowances are taxable as salary unless a provision exempts them, and the new tax regime, which has been the default since the financial year 2023-24, removes nearly every exemption that once applied. The statute changed on 1 April 2026: the Income-tax Act, 2025 (Act No. 30 of 2025) replaced the Income-tax Act, 1961 from that date, and the Income-tax Rules, 2026 replaced the Rules of 1962, notified on 20 March 2026 by Notification No. 22/2026, G.S.R. 198(E). The 1961 Act still governs the return for the financial year 2025-26 filed during 2026. Neither change altered what is taxed; the allowance exemptions were relocated, largely into Schedule III of the 2025 Act.

Three exemptions survive in the old regime only. The house rent allowance exemption is the largest and is computed under Rule 279 of the Income-tax Rules, 2026 as the least of three amounts: the allowance actually received, the rent paid over 10% of salary, and 50% of salary in one of the eight listed metro cities or 40% elsewhere, where salary means basic pay plus dearness allowance. The Leave Travel Concession fare exemption covers two journeys in a block of four calendar years, the current tax block running from 2026 to 2029. The children education allowance exemption is Rs. 100 a month a child, with Rs. 300 a month a child for the hostel subsidy, up to two children, which is a token against the Rs. 2,812.50 the government actually pays.

Two survive under both regimes. Allowances that meet the actual cost of performing an official duty, being the conveyance allowance for official duties, the cost of travel on tour or transfer and the daily allowance on tour, remain exempt because they reimburse an expense rather than confer a benefit. And transport allowance for an employee who is blind, or deaf and dumb, or orthopaedically handicapped in the lower extremities is exempt up to Rs. 15,000 a month plus dearness allowance in the eight metro cities and Rs. 8,000 a month plus dearness allowance elsewhere, under rule 15 of the Income-tax Rules, 2026 in force from 1 April 2026. That figure replaced a Rs. 3,200 a month limit that had stood unchanged since 2018, and the older limit still governs the financial year 2025-26 return.

Everything else is simply salary. Dearness allowance is fully taxable in both regimes and, being the largest allowance, is the largest single taxable addition to pay. The income tax for government employees article works the numbers through both regimes.

Dearness relief for pensioners

Dearness relief is the pension-side equivalent of dearness allowance, paid at the identical percentage on the same half-yearly cycle. It stands at 60% from 1 January 2026, is computed on the basic central government pension and on family pension, and is revised with effect from 1 January and 1 July each year against the same price index. A pensioner’s protection against inflation therefore moves in step with a serving employee’s.

Two differences are worth holding. Dearness relief is the only allowance-type payment every pensioner receives, so it does the work that a dozen allowances do on the serving side, and a pensioner draws no house rent allowance, no transport allowance and no education allowance. Two flat allowances sit alongside it for particular groups: the fixed medical allowance of Rs. 1,000 a month for a pensioner outside a CGHS area, under Department of Pension and Pensioners’ Welfare Office Memorandum No. 4/34/2017-P&PW(D) dated 19 July 2017, and the constant attendant allowance of Rs. 6,750 a month for a pensioner on disability pension with 100% disablement. Neither carries dearness relief. And dearness relief is paid on the full original basic pension even where part of it has been commuted, which is the most common misunderstanding about commutation of pension. The dearness relief article covers the computation and the residence conditions that attach to it.

Allowances across the pay commissions

Each Central Pay Commission reopens the allowance framework, and the 7th CPC’s contribution was consolidation rather than generosity. The 6th Central Pay Commission left a large and untidy set of small allowances, many frozen at rupee values that inflation had made trivial. The 7th CPC pruned that set, abolished the obsolete, including the family planning allowance, merged the overlapping, and replaced dozens of separate field allowances with the single risk and hardship matrix.

Dearness allowance is the constant across every commission, because it is not discretionary. It tracks the price index, is revised twice a year regardless of the commission cycle, and rises steadily between commissions until a new commission’s pay is implemented, at which point it is folded into the revised basic pay and reset to zero. That reset is the mechanism that makes each commission’s minimum pay look larger than it is: the 2.57 fitment factor of 2016 was mostly the 125% dearness allowance being converted into pay.

The 8th Central Pay Commission was constituted by Department of Expenditure Resolution F. No. 01-01/2025-E.III(A) dated 3 November 2025 under Justice Ranjana Prakash Desai and has not reported, so no revised allowance figure for it can be stated as fact. The 7th CPC precedent suggests the sequence rather than the numbers: allowances were carved out of the pay decision, sent to a separate committee, and settled 12 months after pay, with the revised rates admissible from a later date and no arrears for the gap.

Three city lists that are not the same list

Three different city classifications govern three different allowance questions, and treating them as one list is the most common error in this area. There are 8 X class cities in which house rent allowance is 30% of basic pay, 19 cities that carry the higher rate of transport allowance, and 8 metro cities named for the income-tax exemptions in the Income-tax Rules, 2026.

The lists overlap without matching. Pune carries the higher transport allowance and counts as a metro for the income-tax computation, but it is a Y class city for house rent allowance at 20%. Lucknow carries the higher transport allowance and is not an income-tax metro, so an employee with a qualifying disability posted there has an exemption ceiling of Rs. 8,000 a month plus dearness allowance against Rs. 15,000 plus dearness allowance for the same person on the same allowance in Pune. The city classification for HRA article carries the house rent allowance list, and the transport allowance article carries the list of 19.

The reason the lists differ is that they were drawn by different authorities for different purposes. The house rent allowance classification is a Department of Expenditure decision based on population census figures; the transport allowance list was drawn for the size of a city’s commute; and the income-tax metros are a Central Board of Direct Taxes list that has barely changed in decades. None of the three is a subset of the others.

Related Articles

• Cycle (Maintenance) Allowance
• Allowances abolished by the 7th CPC
• Committee on Allowances (Lavasa Committee)
• Honorarium and fee
• Special allowance for child care for women with disabilities
• Constant Attendant Allowance
• Conveyance allowance
• Night duty allowance
• Ad-hoc bonus (non-PLB)
• Productivity Linked Bonus
• Charge allowance and current duty
• Deputation in central government
• Fixed Medical Allowance
• Dearness allowance
• Dearness relief
• House rent allowance
• City classification for HRA
• Transport allowance
• Travelling allowance (TA)
• Children education allowance
• Hostel subsidy
• Leave Travel Concession
• Risk and hardship allowance
• Nursing allowance
• Non-practising allowance
• Running allowance
• Military Service Pay
• Special duty allowance
• Uniform allowance
• Dress allowance
• Deputation (duty) allowance
• Overtime allowance
• Composite transfer grant
• Subsistence allowance
• Take-home salary for central government employees
• Basic pay
• Pay matrix
• Fitment factor
• 7th Central Pay Commission
• 8th Central Pay Commission
• Department of Expenditure
• Department of Personnel and Training
• Income tax for government employees
• Income-tax Act 2025
• Central government pension
• CCS (Pension) Rules, 2021
• Gratuity for central government employees
• Family pension
• Commutation of pension
• National Pension System
• Unified Pension Scheme
• General Provident Fund
• Leave encashment
• Central government employees in India
• 7th CPC salary calculator
• HRA exemption calculator
• Salary by pay level

External references

• Department of Expenditure
• Department of Expenditure: orders and circulars
• Department of Expenditure: pay-related matters
• Department of Expenditure: Central Pay Commission reports
• Department of Personnel and Training
• Department of Pension and Pensioners’ Welfare
• Income Tax Department

References

1. Report of the Seventh Central Pay Commission (submitted 19 November 2015), Chapter 8 (Allowances), paragraph 8.2.6 (196 allowances examined, 52 recommended for abolition, 36 for subsuming) and paragraph 8.10.66 (the 25% escalator on each 50% rise in dearness allowance).
2. Ministry of Finance, Department of Expenditure, Resolution No. 11-1/2016-IC, published in the Gazette of India (Extraordinary), 6 July 2017, notifying the government’s decision on the 7th CPC allowance recommendations with modifications in 34 allowances, effective 1 July 2017.
3. Committee on Allowances (chaired by Finance Secretary and Secretary (Expenditure) Ashok Lavasa), constituted by Department of Expenditure Office Memorandum dated 22 July 2016, report submitted 27 April 2017; Cabinet approval of the allowances package, 28 June 2017.
4. Ministry of Finance, Department of Expenditure, Office Memorandum No. 2/5/2017-E.II(B), dated 7 July 2017 (house rent allowance at 24%, 16% and 8% with the pre-authorised escalation to 27%, 18% and 9% and to 30%, 20% and 10%, and the floors of Rs. 5,400, Rs. 3,600 and Rs. 1,800), and Office Memorandum No. 2/4/2022-E.II(B), dated 30 December 2022 (compendium of instructions on house rent allowance, paragraph 3.1 on the place of duty).
5. Ministry of Finance, Department of Expenditure, Office Memorandum No. 21/5/2017-E.II(B), dated 7 July 2017 (transport allowance rates by pay level and city, and the seven heads of non-admissibility).
6. Ministry of Finance, Department of Expenditure, Office Memorandum No. 1/1(i)/2026-E.II(B), dated 22 April 2026 (dearness allowance at 60% of basic pay with effect from 1 January 2026).
7. Department of Personnel and Training, Office Memorandum No. A-27012/02/2017-Estt.(AL), dated 17 July 2018 (consolidated instructions on Children Education Allowance and Hostel Subsidy), and Office Memorandum No. A-27012/01/2023-Pers.Policy(Allowance), dated 25 April 2024 (25% enhancement from 1 January 2024).
8. Central Civil Services (Pension) Rules, 2021, Rule 31 (emoluments for pension) and Rule 45 (retirement gratuity on emoluments including dearness allowance).
9. Central Board of Direct Taxes, Notification No. 22/2026 [F. No. 370142/41/2025-TPL], G.S.R. 198(E), dated 20 March 2026, notifying the Income-tax Rules, 2026 with effect from 1 April 2026; rule 15 (transport allowance exemption for employees with a specified disability) and Rule 279 (house rent allowance exemption limits).
10. Income-tax Act, 2025 (Act No. 30 of 2025), in force from 1 April 2026, and the Income-tax Act, 1961, Sections 10(5), 10(13A) and 10(14) with Rules 2A, 2B and 2BB of the Income-tax Rules, 1962, which govern the return for the financial year 2025-26.