8th Pay Commission: Your HRA May Rise 30%?

The 8th Pay Commission is expected to revise basic pay using a fitment factor, which directly pushes up HRA. Central government employees at Levels 6 to 10 could see their house rent allowance jump significantly depending on which city they live in.

Here's what happened: The 8th Pay Commission is reviewing pay structures for central government employees, with a fitment factor likely between 1.92 and 2.86 proposed by various bodies.. HRA is calculated as a percentage of basic pay — 27%, 18%, or 9% for X, Y, Z category cities — so any basic pay hike automatically raises HRA.. Employees at Levels 6 to 10 (roughly ₹35,400 to ₹67,700 basic pay today) stand to see the largest absolute HRA gains due to mid-range salary brackets..

What you should do: Calculate your projected new basic pay by multiplying your current basic pay by 1.92 (conservative estimate) and then apply your city's HRA percentage to see your likely revised HRA.. Check whether your current rented accommodation is still tax-efficient — higher HRA means a larger exemption under Section 10(13A), so review your rent agreement and receipts now.. If you are planning to buy a home, factor in the likely HRA increase before deciding — higher HRA exemption may make renting financially smarter for another 1–2 years post-revision..

HRA exemption is the lowest of: actual HRA received, rent paid minus 10% of basic, or city-limit percentage — so always submit rent receipts to HR to claim the full benefit.