Government HRA rules differ from private-sector HRA. Central government uses the 7th Pay Commission CCA (City Compensatory Allowance) classification - X cities (Mumbai, Delhi, Chennai, Kolkata, Hyderabad, Bengaluru): 24% of basic. Y cities: 16%. Z cities: 8%. State governments use their own pay matrices. The exemption under Section 10(13A) still applies, but the HRA received is determined by your CCA classification.
When to use this
Use for: central government employees (CCS, Defence, Railways), PSU staff (SAIL / BHEL / GAIL / IOCL), state government employees (TN / KA / MH / UP / etc), bank PSU staff after 11th BPS revision, university teachers / NCERT / KVS / NVS payroll.
Frequently Asked Questions
What's X / Y / Z city classification?
7th Pay Commission classification for HRA: X (24% HRA) = population 50L+, Y (16%) = 5L-50L, Z (8%) = under 5L. The Ministry of Finance publishes the city list with each pay commission revision. Your CCA bracket on your salary slip tells you which one applies.
Does CCA classification map to metro/non-metro for Section 10(13A)?
Not exactly. CCA classification (X/Y/Z) is for determining what HRA you receive from the government. Metro/non-metro (under Section 10(13A)) is for determining what portion of HRA is tax-exempt. They're separate determinations - you can be in X-classified Hyderabad receiving 24% HRA but apply the 40% non-metro cap for the exemption math.
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