Railway Accounts Department Examinations

Showing posts with label HBA. Show all posts
Showing posts with label HBA. Show all posts

Saturday, March 31, 2018

HBA - House Building Advance

HBA – House Building Advance

·         Significant changes were made in the HBA for Govt employees due to acceptance of 7th Pay Commission.
·         Here are some important changes compared to previous rules

6th PC
7th PC
Maxmimum HBA Amt
7.5 Lakhs
25 Lakhs
Interest Rate
6% to 9.5% for different slabs
Expansion of House
1.8 lakhs
10 lakhs
Cost ceiling limit of the House
30 Lakhs
100 Lakhs ( with a proviso of upward revision of 25% in deserving cases i.e., up to 125 Lakhs)
If both spouses are Govt employees
Only one spouse is eligible
Both spouses are eligible either jointly or separately
Provision of 2.5% higher interest rate above the prescribed rate

Salient features of HBA (after 7th PC)

·         HBA amount: Least of Rs. 25 Lakhs or 34 months basic pay or cost of House/Flat or Repaying capacity.

·         Expansion of House:  Least of Rs.10 Lakhs or 34 months Basic pay or cost of expansion or repaying capacity.

·         Cost ceiling limit of the House  - Rs.1 Crore ( with a proviso of upward revision of 25% in deserving cases i.e., Rs.1.25 Crores)

·         Both spouses, if they are Govt employees are now eligible for HBA either jointly or separately.

·         Migration:  Provision of migration of existing Housing loan from financial institutions/Banks to HBA is existed.

·         Second Charge:  Availing Second Charge on the house for taking loans to fund balance amount from Banks/financial institutions has been simplified. No Objection certificate will be issued along with the sanction letter of HBA, if employee applied.

·         Simple interest rate 8.5%

·         HBA is admissible to an employee once in a life time.

·         Penalty provision (for not complying the conditions)  of 2.5% (higher rate of interest) is withdrawn

·         Recovery of HBA:  Principle in 180 months (15 years) and Interest in 60 months (5 years)

·         The House/flat can be insured with the private insurance companies which are approved by IRDA – Insurance Regulatory Development Authority.