Allowances related to Housing – House Rent Allowance (HRA) : Presently, HRA is payable at the following rates:
| Population of Cities/Towns | Class of Cities/Towns | HRA rates as % of Basic Pay(including MSP and NPA) |
| 50 lakh and above | X | 30 |
| 50–5 lakh | Y | 20 |
| Below 5 lakh | Z | 10 |
There are a large number of demands for paying HRA as a percentage of (Basic Pay + DA), instead of as a percentage of Basic Pay alone, as at present. Representations have also been received regarding enhancement of percentage rates and having only two classifications of Metros and Non-metros (instead of the present classification of X, Y and Z cities). 8.7.5 PBORs of uniformed forces have vehemently argued for doing away with the concept of Authorized Married Establishment and the requirement of a minimum age of 25 years for grant of Compensation in Lieu of Quarters (CILQ).
“The 7th Pay Commission recommends that HRA should be rationalized to 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively. And also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.”