BIG blow to central govt employees! Centre likely to increase interest rates on Housing Building Advances (HBA)

Low-interest House Building Advances are available to Central Government employees (HBA). HBA is currently charged interest at a 7.1 percent rate. The Ministry of Housing & Urban Affairs cut the interest rate on HBA to 7.1 percent through March 31 of 2023 by an office memo dated April 1, 2022. The Center, however, is anticipated to raise the interest rates on HBA beginning with the new fiscal year.

Employees of the Central Government are given access to the HBA facility in accordance with the recommendations of the 7th Pay Commission. In accordance with HBA regulations, Central Government employees are qualified to receive interest-bearing advances for a variety of purposes, including the construction of a new home, the purchase of a home's plot, the expansion of a home, and the purchase of pre-built homes or apartments from housing boards, development authorities, registered builders, etc. HBA may be used to repay loans or advances obtained from the government, HUDCO, or private parties even after the building has begun.

Central Government Employees are entitled to up to 34 months of the basic pay with an HBA ceiling of Rs 25 lakh, as per the 2017 House Building Advance Rules (HBA). If the cost of the house or flat is less than Rs 25 lakh, the employee will only be eligible for the lowest amount as HBA. HBA can also be utilised to add to a current house. According to this clause, employees are eligible for 34 months of basic pay up to a maximum of Rs 10 lakh or the full cost of expansion up to a maximum of Rs 10 lakh.