House rent allowance

House rent allowance is the compensatory allowance paid to central government employees towards rented accommodation, fixed as a percentage of basic pay that varies with the class of the city of posting. It is 30%, 20% and 10% of basic pay in X, Y and Z class cities respectively, the rates in force since 1 January 2024, set by Department of Expenditure Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017, and the conditions governing it are consolidated in Office Memorandum No. 2/4/2022-E.II(B) dated 30 December 2022.

Two orders, not one, govern the allowance, and confusing them is the source of most disputes about it. The Office Memorandum of 7 July 2017 sets the rates, the floors and the city list. The Office Memorandum of 30 December 2022, a consolidated master order issued in supersession of all earlier instructions on the subject, sets who may draw it and what happens to it during leave, transfer, suspension, deputation and training. Anything about the amount comes from the first; anything about entitlement comes from the second.

A third body of rules sits alongside both and belongs to a different statute. The income-tax exemption a rent-paying employee may claim on the allowance is governed by Rule 279 of the Income-tax Rules, 2026, which uses its own definition of salary and its own list of metro cities. Neither definition matches the pay rules, which is why an employee in Pune could draw the allowance at the X class rate while computing the exemption on the lower limb until 1 April 2026.

This article sets out the rates and floors, what basic pay means for this purpose, the classification of cities and the 8-kilometre rule, the link to dearness allowance, worked examples, the government-accommodation bar and the other conditions for drawal, the treatment during leave, transfer, suspension and training, the income-tax exemption with a worked computation, the divergences between the pay rules and the tax rules, and the position under the 8th Central Pay Commission. Every load-bearing figure is cited to the governing order or the tax rule.

Current rates and the floors

House rent allowance is 30% of basic pay in X class cities, 20% in Y class cities and 10% in Z class cities, and has been at those rates since 1 January 2024. They are the top slab under the Office Memorandum of 7 July 2017 and there is no slab above them, so they hold until a new pay commission revises the structure.

The allowance carries a floor. Paragraph 2 of the same order provides that the rates of HRA will not be less than Rs. 5,400, Rs. 3,600 and Rs. 1,800 a month at X, Y and Z class cities respectively. Those figures are 30%, 20% and 10% of the minimum pay of Rs. 18,000, and the 7th Central Pay Commission had not proposed them: the government added them when it accepted the recommendation, to protect employees in Levels 1 to 3 from the reduction in percentages. An employee at Level 1 on Rs. 18,000 in an X class city draws exactly Rs. 5,400, which is both 30% of the pay and the stated minimum, so the floor binds only where the percentage would yield less.

The floors have not been revised since 2017. Because they were computed against a minimum pay that has not changed either, and because the percentage rates have since climbed from 24% to 30%, the floor now bites on nobody at all: at the 30% rate every pay-matrix cell produces more than Rs. 5,400.

What basic pay means for HRA

Basic pay for house rent allowance means the pay drawn in the prescribed level of the pay matrix, and nothing else. Paragraph 3 of Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 states the exclusions expressly: the term does not include non-practising allowance, military service pay, or any other type of pay such as special pay. Paragraph 1.1 of the master order of 30 December 2022 repeats the definition.

This is narrower than the base used for other entitlements, and the difference is not intuitive. Non-practising allowance counts as pay for dearness allowance and for pension and gratuity, but not for house rent allowance. Military service pay counts for dearness allowance and pension, but not for house rent allowance, the annual increment or the composite transfer grant. A medical officer and an armed forces officer therefore both compute HRA on a smaller figure than the one that drives their other allowances.

The second exclusion is the one that costs employees money in the opposite direction. Dearness allowance is never added to the HRA base. Computing 30% of basic pay plus dearness allowance rather than 30% of basic pay alone overstates the allowance by the full DA percentage, and at a dearness allowance of 60% that error inflates the figure by more than half. The HRA calculator applies the correct base, rate and floor for a given level and city class.

City classification and the 8-kilometre rule

Cities are classified into X, Y and Z by the population of the urban agglomeration as recorded in the latest Census, and the class of the place of duty sets the rate. X class covers agglomerations of 50 lakh and above, Y class covers 5 lakh to 50 lakh, and Z class covers everything else by default. The operative list is the annexure to the Office Memorandum of 7 July 2017, which reproduces the classification settled in Office Memorandum No. 2/5/2014-E.II(B) dated 21 July 2015.

Eight cities are X class: Delhi, Greater Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, Ahmedabad and Pune. There is no ninth. Surat, Jaipur, Kanpur, Lucknow and Nagpur are all Y class for HRA despite appearing on the separate 19-city list that governs the higher transport allowance, and mixing the two lists is the most common error on the subject. The city classification for HRA article carries the full list and the state-by-state annexure.

The reference point is the place of duty, not the place of residence. Paragraph 3.1 of the master order of 30 December 2022 states that HRA is admissible with reference to the place of duty of the government servant, irrespective of whether the servant resides at that place or any other place. An employee posted in Delhi who commutes from an unclassified town draws the Delhi rate; an employee posted in that town but living in Delhi does not.

Two extensions widen the qualifying area. Paragraph 3.4 allows staff working in central government establishments within 8 kilometres of the periphery of the municipal limits of a qualified city to draw HRA at that city’s rate, on a dependency certificate from the Collector or Deputy Commissioner, sanctioned initially for three years and extended thereafter by the administrative ministry in consultation with its Financial Adviser. Separately, paragraph 3.4(iv) pays the classified city’s rate to employees anywhere within its urban agglomeration, with the 8-kilometre concession reserved for places outside any agglomeration. Beyond these, standing special orders continue Delhi X class rates at Faridabad, Ghaziabad, NOIDA and Gurgaon, Chandigarh Y class rates at Panchkula and S.A.S. Nagar (Mohali), Jalandhar rates at Jalandhar Cantonment, and Y class rates at Shillong, Goa and Port Blair, under paragraph 6 of the Office Memorandum of 7 July 2017 read with Office Memorandum No. 2/2/2016-E.II(B) dated 3 February 2017.

How the rate is linked to dearness allowance

The 30%, 20% and 10% rates arrived through an escalation written into the 2017 order itself, not through any later rate revision. Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 introduced house rent allowance at 24%, 16% and 8% of basic pay with effect from 1 July 2017, below the 6th CPC rates of 30%, 20% and 10%, on the reasoning that the 2.57 fitment factor had already raised basic pay sharply.

Paragraph 2 of the order then provided that the rates would be revised to 27%, 18% and 9% when dearness allowance crosses 25%, and further to 30%, 20% and 10% when it crosses 50%. Dearness allowance was never notified at exactly 25%: it moved from a frozen 17% to 28% with effect from 1 July 2021, so the middle slab took effect from that date. It reached 50% on 1 January 2024, and the top slab has applied since. Because both step-ups were pre-authorised in the 2017 order, neither required a fresh rate order, and departments acted on the dearness allowance notification alone.

Two features of the escalation were government additions rather than Commission recommendations. The 7th Central Pay Commission had proposed step-ups at dearness allowance of 50% and 100%; the government moved both triggers down, to 25% and 50%, which is why the higher rates arrived years earlier than the report contemplated. The order provides for no further step-up above 50%, so at the current dearness allowance of 60% the rates are at their ceiling.

Worked examples

The amount is the pay-matrix cell multiplied by the rate for the city class, subject to the floor. Dearness allowance plays no part in the arithmetic.

Rates of 30%, 20% and 10% of basic pay under Department of Expenditure Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017, in force since 1 January 2024. Pay-matrix cells from the schedule to the CCS (Revised Pay) Rules, 2016.

House rent allowance rises with every annual increment and with every change of level, because both move the cell. It does not move when the dearness allowance rate is revised, which distinguishes it from transport allowance, where dearness allowance is paid on top of the slab. To see the allowance inside a full gross and take-home figure, use the 7th CPC salary calculator.

Government accommodation and the conditions for drawal

An employee occupying government accommodation does not draw house rent allowance. Paragraph 4.1 of the master order of 30 December 2022 bars the allowance to those who occupy General Pool Residential accommodation, and a licence fee, the standard rent fixed by the Directorate of Estates, is recovered instead.

The order fixes the dates precisely, and they differ by case. HRA stops from the date the accommodation is actually handed over in immediately habitable condition. Where an employee refuses an allotment, HRA ceases from the date of allotment, not from any later date, so a refusal is not a way to keep the allowance. On surrender of the accommodation, HRA becomes payable again from the date of surrender. Paragraph 4.4 then carves out a case that runs the other way: an employee debarred from allotment for unauthorised subletting or another breach of the rules remains eligible for HRA throughout the debarment.

Paragraph 5.1 lists the three circumstances in which an employee is not entitled to the allowance, and all three concern government accommodation held by somebody else. They are sharing accommodation allotted to another government servant; residing in accommodation allotted to a parent, son or daughter by the Central Government, a State Government, an autonomous public undertaking or a semi-government body such as a municipality, port trust, nationalised bank or the Life Insurance Corporation; and having a spouse allotted accommodation at the same station by any of those bodies, whether or not the employee resides in it. Where two or more family members who are government or public-sector employees share a quarter allotted to one of them, paragraph 5.3 allows HRA to only one of them, at their choice.

Owning the house you live in is not a bar. None of the disqualifying conditions turns on rent being paid, and paragraph 5.4 confirms that where husband and wife are both government servants living in hired or owned accommodation, HRA is admissible to both as per their entitlement. The allowance is compensatory and attaches to the post and the station; the requirement of rent actually paid belongs to the income-tax exemption, which is a separate question answered by a separate statute. Two further exclusions round out the scheme: employees in government-run hostels and in hostels run by autonomous or semi-government organisations on subsidised rather than market rent draw no HRA under paragraph 4.5, and an employee reimbursed rent for a temporary stay in a State Bhavan or departmental guest house after a posting draws no HRA for that period, for a maximum of six months, under paragraph 5.5.

HRA during leave

House rent allowance continues during leave at the pre-leave rate for the first 180 days. Paragraph 6.1.1 of the master order of 30 December 2022 defines leave for this purpose as total leave of all kinds under the CCS (Leave) Rules, and names child care leave and extraordinary leave as included, not exceeding 180 days, and the first 180 days where the leave runs longer. Where vacation or holidays are combined with leave, the whole period counts as one spell.

Beyond 180 days the allowance continues only against a certificate. Paragraph 6.1.5 makes drawal for the excess period subject to the certificate in Annexure III to the order, confirming that the employee has continued to retain the accommodation at the station from which the leave was taken. Paragraph 6.1.6 extends the 180-day limit to 8 months where the leave is on a medical certificate in the prescribed form for tuberculosis, cancer or other ailments, and leaves grant beyond 8 months in those cases to the controlling authority for as long as the certificate is available.

Three cases sit outside the general rule. Terminal leave carries no HRA at all, whether or not it runs concurrently with a notice period. Leave preparatory to retirement does carry it, on a certificate that the employee or the family continues to reside at the same station. And study leave approved by the Government of India carries HRA at the place of study without the Annexure III certificate, under paragraph 6.1.7.

Two recovery rules attach. An employee who is sanctioned leave, does not join duty afterwards and resigns is ineligible for HRA for the entire period of that leave, and paragraph 6.1.4 requires the administrative authority to recover the whole amount before the resignation is accepted. Where an employee granted medical leave beyond 180 days ultimately retires on invalidation, or dies during the leave, paragraph 6.1.2 provides that HRA already drawn need not be recovered.

HRA on transfer, joining time and tour

The rule on transfer turns on 90 days. Under paragraph 4.9 of the master order of 30 December 2022, an employee transferred for a period not exceeding 90 days continues to draw HRA at the rate to which he was entitled at the time of transfer, and for a transfer exceeding 90 days the rate is regulated by reference to the new place of posting. Where a transfer initially made for 90 days or less is later extended, the new station’s rate applies from the date of the order extending it.

Two provisions cover the gap between arriving at a new station and settling the family there. Paragraph 4.6 allows an employee permitted to retain the government quarter at the old station, on normal, penal or market rent, to draw HRA at the new station for up to 8 months from the date of transfer. Paragraph 4.7 gives an employee who held no government accommodation at the old station, and who leaves the family behind there because no house has been rented or allotted at the new station, HRA for six months from the date of assuming charge, regulated by the new place of duty, with a note preserving the old station’s rate until the end of the current academic year of the children. Paragraph 4.8 closes both: neither concession runs past the date government accommodation is allotted at the new station.

Joining time and tour are treated differently from each other. During joining time the employee continues to draw HRA at the rate of the station from which he was transferred, but where joining time is affixed to leave it is added to the 180-day leave period rather than treated separately, under paragraph 6.2. During tour, paragraph 6.9 regulates the allowance by reference to the headquarters, so a long tour does not change the rate.

HRA during suspension, deputation abroad and training

House rent allowance continues during suspension at the pre-suspension rate. Paragraph 6.6 of the master order of 30 December 2022 regulates it with reference to Fundamental Rule 53(1)(ii)(b) and Fundamental Rule 54, and requires the Annexure III certificate for periods beyond 180 days from the date of suspension. The allowance is not halved the way pay is: it is subsistence allowance that replaces pay, while HRA and the other compensatory allowances continue on the pre-suspension basis so long as their own conditions hold. Where the headquarters of a suspended employee are changed in the public interest by a competent authority, the note to paragraph 6.6 entitles the employee to HRA at the new station against a certificate referring to it.

On deputation abroad, the allowance follows the family. Paragraph 6.3 makes HRA admissible at the rate of the station in India from which the employee proceeded abroad, for as long as the family remains at that last place of duty, and provides that an employee who later applies for family passage or transfer travelling allowance for the family’s journey is not required to refund HRA drawn up to the date the family actually resided at the Indian headquarters. This is a material relaxation of the 1965 position, under which such a deputationist had to refund the allowance already drawn.

Training is split between two paragraphs. Under paragraph 6.5, an employee sent for training in India whose training period is treated as duty under Fundamental Rule 9(6)(b) draws HRA at either the place of training or the place of duty from which he proceeded, whichever is more favourable, with the Annexure III certificate needed to claim the home station’s rate. Under paragraph 6.4, an employee deputed for training abroad draws HRA for the entire training period at the home-station rate, but leave taken during or immediately after that training to cover stopovers beyond six months is not treated as part of the training and carries no HRA. Paragraph 6.7 separately regulates re-employed pensioners, computing the allowance on pay plus pension, capped at the sanctioned maximum pay of the post where pay plus pension exceeds it.

The income-tax exemption

House rent allowance is taxable salary, and an employee who actually pays rent may claim an exemption on part of it equal to the least of three amounts. Since 1 April 2026 the computation sits in Rule 279 of the Income-tax Rules, 2026, which prescribes the limits for the special allowance at serial number 11 of the table in Schedule III to the Income-tax Act, 2025; before that date it was Rule 2A of the Income-tax Rules, 1962, read with Section 10(13A) of the Income-tax Act, 1961. The three amounts are unchanged by the renumbering:

1. the actual house rent allowance received for the period;
2. the rent actually paid, minus 10% of salary for the period; and
3. 50% of salary where the accommodation is in a listed metro, or 40% of salary elsewhere.

Salary for this computation means basic pay plus the dearness allowance that forms part of the terms of employment, and excludes all other allowances and perquisites, in the words of Rule 279(2)(b) of the Income-tax Rules, 2026. Commission at a fixed percentage of turnover is read in by judicial construction rather than by the text, on the Supreme Court decision in Gestetner Duplicators (P) Ltd v CIT, and does not arise for a government employee. For a central government employee salary here is basic pay plus dearness allowance, which is a wider base than the one the allowance itself is computed on. The dedicated HRA exemption under Section 10(13A) article works through the computation in full, and the HRA exemption calculator applies it to a given set of figures.

One restriction decides the question for most filers. The exemption exists only under the old tax regime. The default regime under Section 115BAC, which an employee must actively opt out of, does not allow it, so claiming HRA means choosing the old regime and weighing the exemption against the lower slab rates. For the wider treatment see income tax for government employees and old versus new tax regime.

A worked exemption

The least-of-three rule resolves quickly with figures. Take a Level 7 employee posted in Delhi on basic pay of Rs. 44,900, with dearness allowance at 60%, the rate in force since 1 January 2026, so salary for the exemption is Rs. 44,900 plus Rs. 26,940, or Rs. 71,840 a month. The employee draws house rent allowance of 30% of basic pay, Rs. 13,470 a month, and pays rent of Rs. 20,000 a month.

The exemption is the least of the three, Rs. 12,816 a month, so Rs. 654 of the allowance is taxable and Rs. 1,53,792 a year is exempt.

The pattern in that table is the general one for a government employee, and it explains why the metro question matters so little here. The allowance is capped at 30% of basic pay, while the third limb is 40% or 50% of basic pay plus dearness allowance, which at a dearness allowance of 60% works out to roughly 64% or 80% of basic pay. The third limb is therefore never the smallest. The exemption is always decided between the actual allowance and the rent-linked limb, and it collapses to nothing where no rent is paid, because limb two is then negative.

Metro cities for the tax exemption from 1 April 2026

Eight cities qualify for the 50% limb from 1 April 2026: Delhi, Mumbai, Kolkata and Chennai, joined by Bengaluru, Hyderabad, Pune and Ahmedabad. The four were added by the Income-tax Rules, 2026, notified on 20 March 2026 by Notification No. 22/2026, F. No. 370142/41/2025-TPL, G.S.R. 198(E), which came into force on 1 April 2026 and replaced the Income-tax Rules, 1962.

The change takes effect by financial year, not by filing date. Income earned from 1 April 2026, which the Income-tax Act, 2025 calls the tax year 2026-27 and older references call assessment year 2027-28, uses the eight-city list. Returns for the financial year 2025-26, filed during 2026, continue to apply the four-city list under the old Rule 2A, so an employee in Bengaluru filing in 2026 is still on the 40% limb for that year.

For a central government employee the expansion changes the figure in almost no case, for the reason set out above: the rent-linked limb binds before the metro cap is reached. The employees it reaches are those whose allowance approaches half of salary, which is a private-sector pay structure rather than a pay-matrix one. The change matters most on this site as an alignment: the tax list and the X class pay list now name the same eight cities, closing a mismatch that had persisted for decades.

Documents, rent paid to family, and the housing loan

Substantiating the rent is what the exemption turns on in practice. The employer requires a declaration of rent supported by receipts and, where asked, a rent agreement, and where the aggregate rent for the year exceeds Rs. 1,00,000 the landlord’s Permanent Account Number must be furnished. The threshold sits in the rule itself, at Rule 26C of the Income-tax Rules, 1962 to 31 March 2026 and at Rule 205 of the Income-tax Rules, 2026 after that date. The declaration form changed with the new rules: Form 12BB was replaced by Form No. 124 from 1 April 2026, which additionally requires the employee to disclose the relationship with the landlord.

Rent paid to a family member is allowed, and disallowed only on the facts. An employee who pays rent to a parent or other relative who owns the house can claim the exemption where the arrangement is genuine, meaning that rent is actually paid, the owner declares it as income in their own return, and the payment can be evidenced through a bank trail. A paper arrangement with no real payment fails, and the new disclosure of the landlord relationship in Form 124 makes the question one the assessing officer sees at the outset rather than on scrutiny. An employee who lives in a house he or she owns and pays no rent has no claim at all, because limb two is nil, though as set out above that employee still draws the allowance itself.

Claiming the exemption and a housing-loan interest deduction in the same year is permitted where each condition is independently satisfied. The two provisions test different facts: the exemption turns on rent actually paid for the residence occupied, and the interest deduction turns on interest actually paid on a loan for a property owned. The ordinary case is an employee posted in one city on rent while owning a house in another, and the claim fails only where the facts do not support one of the two limbs, not because the two cannot coexist. An employee who pays no rent and claims no housing loan may instead fall within Section 80GG, which gives a limited deduction for rent to those who receive no house rent allowance, and which is also unavailable under the new regime.

Divergence between the pay rules and the tax rules

The pay rules and the tax rules use the same two words, basic pay and metro, to mean different things, and both mismatches produce errors in the same direction.

The first is the base. For the Department of Expenditure the allowance is computed on the pay-matrix cell alone, excluding non-practising allowance, military service pay and dearness allowance. For the tax computation, salary means basic pay plus dearness allowance. The figure that determines how much is paid and the figure that determines how much is exempt are therefore computed on different bases and cannot be substituted for one another.

The second was the meaning of metro, and it has narrowed rather than disappeared. Until 31 March 2026 the 50% limb reached only Delhi, Mumbai, Kolkata and Chennai, while the allowance itself was paid at the X class rate in eight cities, so an employee in Pune drew 30% of basic pay but computed the exemption on the 40% limb. From 1 April 2026 the two lists name the same eight cities. What remains is that the pay classification has three tiers and the tax rule has two, so a Y class city and a Z class city are treated identically for tax while drawing 20% and 10% respectively as allowance.

A third divergence is the one most often missed, and it runs the other way. Entitlement to the allowance does not require rent to be paid, while the exemption does. An employee living in a house he owns draws the full allowance under the master order of 30 December 2022 and gets no exemption on it under Rule 279, and the whole amount is taxable salary.

House rent allowance before the 7th CPC

The current three-tier structure is a consolidation of a much more granular older scheme. The 6th Central Pay Commission paid house rent allowance at 30%, 20% and 10% of basic pay for X, Y and Z cities, having itself reclassified cities into those three letters. The 5th Central Pay Commission before it had used six categories, A-1, A, B-1, B-2, C and unclassified towns, but only four rates: 30% for A-1, 15% for A, B-1 and B-2 alike, 7.5% for C and 5% for unclassified towns, under item 2(iii) of the Annexure to Resolution No. 50(1)/IC/97 dated 30 September 1997. The reduction from six tiers to three is the main structural change of the last two revisions.

The 7th Central Pay Commission kept X, Y and Z but reset the percentages down to 24%, 16% and 8%, on the reasoning that the 2.57 fitment had raised basic pay, and then allowed them to climb back through the dearness-allowance escalation. The net effect, once dearness allowance reached 50% on 1 January 2024, was to return the headline percentages to the 6th CPC’s 30%, 20% and 10%, applied to the higher 7th CPC basic pay. The seven-year path from 24% back to 30% is the reason the allowance rose without any pay commission recommending an increase.

House rent allowance and the 8th Central Pay Commission

The current rates and floors stand until the 8th Central Pay Commission reports and revised rules are notified. The Commission was constituted by Department of Expenditure Resolution F. No. 01-01/2025-E.III(A) dated 3 November 2025 and will review the allowance structure alongside pay, with house rent allowance within its terms of reference.

The precedent points to a reset rather than continuity. Each of the last two commissions has revisited the percentages when it revised pay, and the 7th did so by cutting them and rebuilding an escalation on top. Whether the 8th retains 30%, 20% and 10%, resets them lower against a fresh fitment factor, or revisits the city classification against a newer Census is for the Commission to recommend and the government to accept. Until then, any 8th CPC house rent allowance figure in circulation is a projection.

Related Articles

• HRA exemption under Section 10(13A)
• City classification for HRA
• Allowances for central government employees
• Dearness allowance
• Transport allowance
• Leave Travel Concession
• Children education allowance
• Non-practising allowance
• Military service pay
• Subsistence allowance
• Old vs new tax regime
• Income tax for government employees
• Income-tax Act 2025
• Standard deduction
• 7th Central Pay Commission
• 8th Central Pay Commission
• 6th Central Pay Commission
• 5th Central Pay Commission
• Pay matrix
• Minimum pay
• Fitment factor
• Annual increment
• Pay fixation
• CCS (Leave) Rules
• Child care leave
• Extraordinary leave
• Study leave
• Leave preparatory to retirement
• Joining time
• Suspension
• Directorate of Estates
• Central government employees in India
• Take-home salary of central government employees
• Department of Expenditure
• Department of Personnel and Training
• HRA calculator
• HRA exemption calculator
• 7th CPC salary calculator

External references

• Department of Expenditure, Ministry of Finance
• Compendium of instructions regarding grant of House Rent Allowance (doe.gov.in)
• Department of Expenditure orders and circulars
• 7th Central Pay Commission report (doe.gov.in)
• Income Tax Department
• Department of Personnel and Training

References

1. Ministry of Finance, Department of Expenditure, Office Memorandum No. 2/5/2017-E.II(B), dated 7 July 2017, prescribing house rent allowance rates of 24%, 16% and 8% with effect from 1 July 2017, the minimum amounts of Rs. 5,400, Rs. 3,600 and Rs. 1,800, the dearness-allowance-linked escalation to 27/18/9 and 30/20/10, the exclusion of non-practising allowance and military service pay from basic pay, and the annexure classifying cities.
2. Ministry of Finance, Department of Expenditure, Office Memorandum No. 2/4/2022-E.II(B), dated 30 December 2022, the Compendium of Instructions regarding grant of House Rent Allowance to Central Government employees, issued in supersession of all earlier instructions: paragraphs 3.1 and 3.4 (place of duty and the 8-kilometre rule), 4.1 to 4.9 (government accommodation and transfer), 5.1 to 5.5 (conditions for drawal), 6.1 to 6.9 (leave, joining time, deputation, training, suspension and tour) and 7 (certificates).
3. Ministry of Finance, Department of Expenditure, Office Memorandum No. 2/5/2014-E.II(B), dated 21 July 2015, settling the classification of cities and towns for house rent allowance.
4. Ministry of Finance, Department of Expenditure, Office Memorandum No. 2/2/2016-E.II(B), dated 3 February 2017, continuing the special dispensation rates for Faridabad, Ghaziabad, NOIDA, Gurgaon, Panchkula, S.A.S. Nagar (Mohali) and Jalandhar Cantonment.
5. Report of the Seventh Central Pay Commission (submitted 19 November 2015), chapter on house rent allowance.
6. 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 279 prescribes the limits for the house rent allowance exemption at serial number 11 of the table in Schedule III to the Income-tax Act, 2025, and lists eight cities for the 50% limb.
7. Income-tax Act, 1961, Section 10(13A), and Income-tax Rules, 1962, Rule 2A, governing the exemption for periods up to 31 March 2026.
8. Income-tax Rules, 1962, Rule 26C, prescribing Form 12BB and requiring the landlord’s Permanent Account Number where the aggregate rent for the year exceeds Rs. 1,00,000, and Income-tax Rules, 2026, Rule 205, prescribing Form No. 124 on the same threshold with the additional disclosure of the relationship with the landlord.
9. Ministry of Finance, Department of Expenditure, Resolution F. No. 01-01/2025-E.III(A), dated 3 November 2025, constituting the 8th Central Pay Commission.