Income Tax Slabs

Complete HRA rate reference for India — 7th CPC X/Y/Z city classification for government employees and Metro/Non-Metro income tax exemption rates. Includes the landmark 2026 metro expansion update.

30%X-Class (Current)
20%Y-Class (Current)
10%Z-Class (Current)
8 Cities50% Metro FY 2026–27

HRA Rates Quick Reference

Switch between Govt employee (7th CPC) rates and Income Tax exemption rates

🏛️ 7th CPC Govt Rates (X/Y/Z)
🧾 Income Tax Exemption (Metro/Non-Metro)

Current applicable rates (DA has crossed 50% as of January 2026 — highest slab applies)

Base Slab
DA < 25%
X: 24% | Y: 16% | Z: 8%
Slab 1
DA ≥ 25%
X: 27% | Y: 18% | Z: 9%
Slab 2 NOW
DA ≥ 50% (Jan 2026)
X: 30% | Y: 20% | Z: 10%
Class X City
30%
of Monthly Basic Pay
Min: ₹5,400 / month
Class Y City
20%
of Monthly Basic Pay
Min: ₹3,600 / month
Class Z City
10%
of Monthly Basic Pay
Min: ₹1,800 / month

X Class
30%
Y Class
20%
Z Class
10%
Formula: HRA payable = MAX(Basic Pay × Applicable Rate%, Minimum Floor Amount). DA has reached 50% as of January 2026, so all Central Govt employees are now in the highest HRA slab under the 7th CPC. Next revision expected only under the 8th Pay Commission.

Applicable under Old Tax Regime — Section 10(13A) of the Income Tax Act, 1961

Metro City
50%
of Basic Salary (as Rule B)
Delhi · Mumbai · Kolkata · Chennai
+ Bengaluru, Hyderabad, Pune, Ahmedabad from FY 2026–27
Non-Metro City
40%
of Basic Salary (as Rule B)
All other cities — Noida, Gurgaon,
Navi Mumbai, Lucknow, Jaipur, etc.
Metro (50%)
50%
Non-Metro (40%)
40%
Remember: Rule B (50%/40%) is just ONE of three rules. HRA exempt = Minimum of (A) Actual HRA received, (B) 50%/40% of Basic+DA, (C) Rent paid − 10% of Basic+DA. Use our HRA Exemption Calculator for your exact figure. Available under Old Tax Regime only.

Complete HRA Rates Reference

All HRA rate slabs, city classifications, and 2026 updates in one place

🔔
Major 2026 Update: 8 Cities Now Get 50% HRA Exemption from FY 2026–27

The Draft Income Tax Rules 2026 (notified February 2026) expand the 50% HRA exemption to 4 additional cities: Bengaluru, Hyderabad, Pune, and Ahmedabad — effective from FY 2026–27 (April 1, 2026 onwards). Previously, only Delhi, Mumbai, Kolkata, and Chennai qualified for 50%. Employees in these 4 new cities can now claim 50% of Basic Salary as Rule B instead of 40%, resulting in significant tax savings. Verify with your employer/CA for official circular references before filing.

📋7th CPC HRA Rates — All DA Slabs

8th Pay Commission: A new pay commission is expected by 2026–27. HRA rates and city classifications will likely be revised afresh under the 8th CPC. Watch for official notifications on dopt.gov.in.

🏙️Metro Cities for HRA: FY 2025–26 vs FY 2026–27

✅ Original 4 Metro Cities (50%)

• Delhi (NCT)
• Mumbai (Greater Mumbai)
• Kolkata
• Chennai

Applicable since inception of HRA exemption rules under Sec 10(13A)

🔶 4 New Metro Cities from FY 2026–27

• Bengaluru (Bangalore)
• Hyderabad
• Pune
• Ahmedabad

Draft Income Tax Rules 2026 — effective April 1, 2026 (FY 2026–27)

🗺️7th CPC City Classification — X, Y, Z

Cities are classified under three tiers based on population (Census 2011) and strategic importance. Classification determines HRA rate for central government employees.

Class X Cities

HRA: 30% of Basic

Population > 50 Lakh (50 Lakhs+)
Major metro & urban agglomerations

Delhi (NCR)
Mumbai (UA)
Kolkata (UA)
Chennai (UA)
Bengaluru (UA)
Hyderabad (UA)
Ahmedabad (UA)
Pune (UA)

Class Y Cities

HRA: 20% of Basic

Population 5 Lakh – 50 Lakh
State capitals & major district hubs

Jaipur
Lucknow
Kanpur
Nagpur
Patna
Bhopal
Indore
Ludhiana
Agra
Vadodara
Surat
Visakhapatnam
Coimbatore
Kochi
Chandigarh
+others

Class Z Cities

HRA: 10% of Basic

Population < 5 Lakh
District HQs, Tier-3/4 cities, rural postings

All district HQs not in X/Y
Small towns
Rural postings
Remote areas
Cantonments (if applicable)
Note: Noida, Gurgaon (Gurugram), Faridabad, Navi Mumbai, and Thane — though part of large metro regions — are classified separately. Employees in these areas may get Delhi/Mumbai X-class HRA rates if specifically notified. Check the Ministry of Defence HRA classification list or your department’s notification.

💰HRA Amount Chart — All Classes by Pay Level

Monthly HRA payable at current rates (DA ≥ 50% slab). HRA = MAX(Basic × Rate, Minimum Floor)

📌Key HRA Rules to Remember

Rule 1

No Govt Accommodation

HRA is not payable if government accommodation is allotted. Employees who have been allotted quarters but refuse to vacate also lose HRA eligibility.

Rule 2

Minimum Floor Guarantee

Even if calculated HRA is lower, the government guarantees a minimum of ₹5,400 / ₹3,600 / ₹1,800 for X/Y/Z cities under 7th CPC.

Rule 3

DA-Linked Revision

Govt HRA rates are automatically revised when DA crosses 25% and 50%. No separate order needed — the rate change is pre-notified in the 7th CPC OM.

Rule 4

Transfer & City Change

If transferred to a different class city, HRA changes from the date of joining at the new station. No HRA is paid during transit period if free transport is provided.

Rule 5

Rent-Free Accommodation

If employer provides rent-free/subsidised accommodation (private sector), the perquisite value is taxed instead. HRA exemption is not applicable in this case.

Rule 6

PAN Mandatory Above ₹1L

For HRA tax exemption claims, if annual rent exceeds ₹1,00,000, the landlord’s PAN must be submitted to the employer for Form 12BB and Form 16 purpose.

Frequently Asked Questions

Quick answers on HRA rates, city classification, and 2026 changes

What is the current HRA rate for central government employees in 2026?
▾
As of January 2026, DA has crossed 50%, triggering the highest slab under the 7th CPC. Current HRA rates are: X Class cities: 30%, Y Class cities: 20%, and Z Class cities: 10% of monthly basic pay. Minimum floors of ₹5,400, ₹3,600, and ₹1,800 apply respectively. These rates were auto-revised as per the 7th CPC Office Memorandum dated July 7, 2017.
Which cities are Class X, Y, Z under 7th CPC?
▾
Under the 7th CPC: Class X (30% HRA): Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad, Pune — all urban agglomerations with 50 lakh+ population. Class Y (20% HRA): Cities with 5–50 lakh population including Jaipur, Lucknow, Kanpur, Nagpur, Patna, Surat, Chandigarh, Coimbatore, Kochi, Indore, Bhopal, etc. Class Z (10% HRA): All remaining towns and rural postings below 5 lakh population.
What is the difference between 7th CPC HRA and Income Tax HRA?
▾
These are two separate frameworks. 7th CPC HRA is what the government actually pays to central government employees (30%/20%/10% of basic pay based on X/Y/Z city class). Income Tax HRA exemption (Sec 10(13A)) determines how much of any HRA received (from any employer) is tax-free — calculated as minimum of 3 rules using 50%/40% for Metro/Non-Metro. A private sector employee receives HRA as per their CTC and claims tax exemption based on the 3-rule formula.
Will HRA rates increase under the 8th Pay Commission?
▾
Yes, HRA rates are expected to be revised under the 8th Pay Commission. The 7th CPC had revised rates upward from 6th CPC levels. Typically, new pay commissions revise city classifications, HRA percentages, and minimum floor amounts. The 8th Pay Commission was constituted in 2025 and its recommendations are expected by 2026–27. Monitor dopt.gov.in for official updates.
Are Noida, Gurgaon, and Navi Mumbai in Class X or Y for govt HRA?
▾
Noida, Gurgaon (Gurugram), Faridabad, and Ghaziabad are part of the Delhi NCR urban agglomeration but are not always automatically classified as X class on their own. However, the Ministry of Defence and other departments have specifically notified that Central Govt employees posted in Faridabad, Ghaziabad, NOIDA, and Gurgaon are entitled to Delhi (X class) HRA rates. Check your specific department’s HRA classification order. Similarly, Navi Mumbai and Thane employees may be entitled to Mumbai (X class) rates.
From when do Bengaluru, Hyderabad, Pune and Ahmedabad get 50% HRA exemption?
▾
According to the Draft Income Tax Rules 2026 notified in February 2026, Bengaluru, Hyderabad, Pune, and Ahmedabad are proposed to be classified as “Metro” cities for HRA tax exemption purposes, enabling employees in these cities to claim 50% of Basic Salary as Rule B (up from 40%). This change is effective from FY 2026–27 (April 1, 2026 onwards). Employees should inform their employers via Form 12BB to update HRA computation from April 2026. Confirm via official CBDT circular before filing.
Disclaimer: HRA rates and city classifications are subject to change via government notifications. Always verify current rates with your DDO/PAO (for government employees) or CA/employer (for private sector). For official 7th CPC HRA rules, refer to Department of Expenditure. For income tax HRA rules, visit Income Tax India Portal.