HRA calculation for Officers

HRA is calculated as per the rate agreed in the Bi-partite settlement and there are 5
categories/options of calculating and paying HRA for Officers.

The categories are:

i. Declaration Basis
ii. Rent Receipt Basis
iii. Living in Own House
iv. Leased Accommodation
v. Living in Bank Quarter

Calculation of HRA is as follows:

i. Declaration Basis

HRA is calculated as per the rate agreed upon in the Bi-partite for the area in which
the Officer works.

ii. Rent Receipt Basis

If an Officer produces a rent receipt, the HRA payable to his/her shall be the actual
rent paid by him / her for the residential accommodation in excess over 1.2% of pay
in the first stage of the Scale of Pay in which he / she is placed with a maximum of
150% of the House Rent Allowance payable as per the agreed rate in the Bi-partite
settlement.

Example No.1

Say a Scale I Officer, whose revised Basic Pay is Rs.20100/-, is working at Area I
Branch. He pays Rs.2000/- p.m. as rent for his house and has produced the
undertaking letter obtained from his house owner to the Branch.

STEP 1 Rent Rs. 2000.00

Less: 1.2 % of his initial Basic Pay in Scale I(14500) Rs. 174.00

Rs. 1826.00

STEP 2 His present basic pay Rs.20100/-

(Area 1) – (Eligible HRA @ 7.5 %of pay ) Rs. 1507.50

150% of eligible HRA under certificate basis Rs. 2261.25

i.e., 150% x 1507.50

Eligible HRA under Rent Receipt Basis is least Rs. 1826.00

Least among Step 1 & Step 2
 Example No.2

Say, a Scale III Officer whose revised Basic Pay is Rs.31500/- and receives revised
PQA – I Rs.410/- as on 01-11-2011. He is working at Major A Class Branch. He pays
Rs.6000/- p.a. as rent for his house and has produced the undertaking letter
obtained from his house owner to the Branch.

STEP 1
Rent Rs. 6000.00
Less: 1.2 % of his initial Basic Pay in Scale III (25700) Rs. 308.40
Rs. 5691.60

STEP 2 His present basic pay Rs.31500/- + PQA Rs.410/-

(Major ‘A’ Class) – (Eligible HRA under Certificate Basis)
= Rs.31910 x 8.5% Rs. 2712.35
150% of eligible HRA under certificate basis Rs. 4068.50
i.e., 150% x 2712.35
Eligible HRA under Rent Receipt Basis is least Rs. 4068.50
amount among Step 1 & Step2

iii. Officer living in his own House

The claims of Officer Employees for House Rent Allowance linked to the cost of
their ownership accommodation shall also be restricted to 150% of House Rent
Allowance as hitherto.

Example

For an officer working in Major ‘A” Class city

1. Capital cost of accommodation inclusive of land Rs. 1,25,000.00

2. Annual Corporation Taxes paid Rs. 1,800.00
3. Annual rental value taken by for assessment Rs. 24,000.00

Calculation of Notional monthly rent:

A. Aggregate of
1. Taxes paid Rs. 1,800.00
2. 12% of Capital Cost Rs. 15,000.00
ADD Rs. 16,800.00
Divided by 1/12 Rs. 1,400.00
B. Rent assessed by Corporation Rs.24000/12 Rs. 2,000.00
 Therefore, the monthly rent to be taken for calculation of HRA as per the same basis for
production of rent receipts - calculation to be made as in the case of (ii) stated above.

i.e. higher of ‘A’ and ‘B’ Rs. 2,000.00

(Notional Monthly Rent)

Note:

The following are to be produced for claiming HRA under this head:
1. Valuation Certificate including land cost
2. Municipal / Corporation tax receipts
3. Municipal / Corporation assessment order for the annual rental value
of the accommodation.

iv. Leased Accommodation

Bank will pay the rent agreed upon by the Officer with the land lord of the
house/flat through a lease agreement which was duly approved by the Bank up to the
maximum amount prescribed by the Bank from time to time for various scales and
place.

v. Living in Bank Quarter

No HRA will be paid to the Officer, since the accommodation is provided by the Bank.

Bank will deduct the House rent recovery from the salary, which shall be @ 1.20 % of
the first stage of the scale of pay in which the officer is placed or the standard rent
for the accommodation, whichever is less.

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