Ans:
The central government has classified the cities and towns into three categories, namely, X, Y, and Z. The house rent allowance for central government employees is impacted by an increase in their dearness allowance. The HRA in 7th pay commission rules vary across the categories of cities and is in accordance with the standard of living in those cities. HRA for central government employees is 27% in the X category of cities, 18% in the Y category of cities and 9% in the Z category of cities.