8th Pay Commission: Will Your HRA Hit 40%?

Employee bodies are pushing for HRA up to 40% of basic pay under the 8th Pay Commission. If approved, lakhs of central government employees could see a significant jump in their take-home salary and housing budgets.

Here's what happened: Staff bodies including NC-JCM and defence employee unions have formally proposed HRA rates up to 40% of basic pay under the 8th Pay Commission.. Currently, central government employees receive HRA in three slabs — 27%, 18%, and 9% of basic pay — based on the city classification (X, Y, Z).. The 8th Pay Commission, set up in January 2025, is expected to submit its recommendations before implementation from January 2026..

What you should do: Calculate your current HRA: multiply your basic pay by 27%, 18%, or 9% depending on your city class — then estimate what 30–40% would mean for you.. If you are a central government employee renting a home, start tracking your actual rent receipts now so you are ready to claim the revised HRA the moment it is notified.. Check whether a higher HRA will affect your income tax — HRA exemption has a ceiling based on actual rent paid, so plan rent agreements accordingly to maximise tax savings..

HRA exemption is the minimum of: actual HRA received, rent paid minus 10% of basic salary, or 50%/40% of basic (metro/non-metro). A higher pay commission HRA only helps you if your actual rent keeps pace — renegotiate your rent agreement before the revision kicks in.