A lot is going to change for central employees. Actually, the government had constituted the Eighth Pay Commission in November last year. The purpose of this formation is to review and recommend amendments in the salary, allowances and pension and other facilities of the central employees.
Amidst this environment, the question is whether the Pay Commission will recommend changes in House Building Advance (HBA)? Let us know the details of the scheme.
What are the details of the scheme?
This central government scheme is only for central employees. Under this, loans are given to employees at low interest rates to buy a house, build a new house or expand the existing house. This scheme provides funds to employees at concessional interest rates compared to normal home loans. If you are a central employee, you can take house building advance to buy a new house, construct it or expand the existing house.
How much amount do you get?
To buy or build a new house, a central employee can get an amount equal to a maximum of 34 months’ basic salary. However, its maximum limit has been fixed at Rs 25 lakh. The amount which is lowest within the actual cost, repayment capacity and prescribed limit will be accepted. A maximum HBA of up to Rs 10 lakh is available for expansion of an existing house.
What is the interest rate?
According to the office memorandum issued by the Ministry of Housing and Urban Affairs (MoHUA), now 7.10 percent interest will have to be paid on house building advance approved from April 1, 2026 to March 31, 2027. Earlier in the financial year 2025-26 this rate was 7.44 percent.
As per the rules, the cost of construction or purchase of a house (except the price of the plot) should not exceed 139 times the basic salary of the employee. Its maximum limit is fixed at Rs 1 crore.
When will the Pay Commission give recommendations?
The Eighth Pay Commission may submit its recommendations to the government by the first half of next year. It is for the government to decide whether to implement the recommendations in letter and spirit or make any changes in it. It is believed that after the implementation of the recommendations of the Pay Commission, there will be a big increase in the salary of central employees. Let us tell you that the Pay Commission was formed last year. The Pay Commission launched the website in February this year. After this, the round of Pay Commission meetings has started.