By Central 8th Pay Commission Admin
HRA Reset Alert: Why Your House Rent Allowance Might ‘Percentage-Wise’ Drop in 2026 (But You Still Gain Cash!)
Updated: January 2, 2026 | 20:30 IST
However, once the 8th CPC is implemented and the Dearness Allowance (DA) is merged or reset to Zero, the HRA percentage will technically “reset” to lower slabs. Does this mean a loss? Absolutely not. Let’s decode the math.
The “Reset” Mechanism: From 30% Back to 24%?
Under the 7th CPC rules, HRA rates are dynamic. They started at 24%, 16%, and 8%, and increased to 27%, 18%, and 9% when DA crossed 25%, and finally to 30%, 20%, and 10% when DA crossed 50%.
The 8th CPC Scenario: When your Basic Pay is revised (multiplied by a fitment factor of ~2.5x or more), the DA counter usually starts from zero. Consequently, the HRA percentage is expected to revert to the base rates.
| City Category | Current Rate (7th CPC) | Expected Base Rate (8th CPC) |
|---|---|---|
| X Cities (Metro) Delhi, Mumbai, Bengaluru, etc. |
30% | 24% or 27% (Proposed) |
| Y Cities (Tier-2) Lucknow, Jaipur, Nagpur, etc. |
20% | 16% or 18% |
| Z Cities (Others) All other towns |
10% | 8% or 9% |
The Cash Calculation: Why You Still Win
Even if the percentage drops, your cash in hand will skyrocket because the “Base” (Basic Pay) will be much larger.
Current: Basic ₹18,000 x 30% HRA = ₹5,400
8th CPC (Est): Basic ₹46,000 (approx) x 24% HRA = ₹11,040
Result: Your HRA amount more than DOUBLES even at a lower percentage!
Will Your City Upgrade?
The 8th Pay Commission is also likely to review the city classification based on the latest Census or population estimates. Cities like Pune and Ahmedabad were upgraded to ‘X’ in the past. Employees in fast-growing hubs like Surat, Kanpur, and Visakhapatnam are hopeful for an upgrade to ‘X’ status, which would instantly jump their HRA entitlement.