House Building Advance – HBA

House Building Advance – HBA

The Scheme of House Building Advance to Central Government Employees is applicable for constructing/acquiring house/flats of their own. Also shortly known as HBA, is admissible to all permanent employees and to temporary employees who have rendered 10 years of continuous service.

With effect from 27-11-2008, the following provisions of grant of House Building Advance shall be in operation, until further orders:-

The maximum limit for grant of HBA shall be 34 months’ of pay in the pay band subject to a maximum of Rs. 7.50 lakh or cost of the house or the repaying capacity whichever is the least, for new construction/purchase of new house/flat.

The maximum limit for grant of HBA for enlargement of existing house shall be 34 months’ pay in the pay band subject to a maximum of Rs. 1.80 lakh or cost of the enlargement or repaying capacity, whichever is the least.

The cost ceiling limit shall be 134 times the pay in the pay band subject to a minimum of Rs.7.50 lakh and a maximum of Rs.30 lakh relaxable up to a maximum of 25% of the revised maximum cost ceiling of Rs.30 lakh.

The rate of interest on House Building Advance is between 5% to 9.5% ,depending on the loan amount.

The repaying capacity of Govt. servants who have more than 20 years of remaining service has been revised from 35% to 40% of pay. (Pay means pay in the pay band).

HBA is granted for:

Constructing a new house on the plot owned by the official or the Official and the Official’s wife/husband jointly.

Purchasing a plot and constructing a house thereon.

Purchasing a plot under Co-operative Schemes and Constructing a house thereon or acquiring house through membership of Co-operative Group Housing Scheme.

Purchasing /construction of house under the Self-Financing scheme of Delhi, Bangalore, U.P., Lucknow etc.

Outright purchase of new ready-built house/flat Housing boards, Development Authorities and other statutory or semi-Government bodies and also from private parties.

Enlarging living accommodation in an existing house owned by the official or jointly with his/her wife/husband. The total cost of the existing structure (excluding cost of land) and the proposed additions should not exceed the prescribed cost ceiling.

Repayment of loan or advance taken from a Government or HUDCO or Private source even if the construction has already Commenced, subject to certain conditions.

Constructing the residential portion only of the building on a Plot which is earmarked as a shop-cum-residential plot in a Residential colony.


If both the husband and wife are Government of India employees, HBA shall be admissible to only one of them.

The applicant or spouse or minor child should not already own a house in the town/Urban agglomeration where the

house is proposed to be constructed or acquired.

The title to the land should be clear. The land may be owned either:by the Government employee; or jointly by the Government employee and spouse.

S. No.             Length of remaining service . Repaying Capacity

1. Retiring after 20 years. –40% of pay in the pay band

2. Retiring after 10 years but not later than 20 years. —40% of pay in the pay                   band @ plus 65%of * Retirement Gratuity

3. Retiring within 10 years —50% of pay @ plus 75% of * Retirement Gratuity

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6 thoughts on “House Building Advance – HBA”

  1. Sir, whether interest accrued on HBA can be claimed for exemption from Income Tax even if the interest recovery has not started?

  2. i am a central government employee. i have taken HBA of Rs 2.5 lakh. now i want to refund the whole principal and interest in one lumpsum, while my recovery of HBA has not been started. what are the rules governing such repayment of HBA in one lump sum?

  3. Sir, If both husband and wife are govt. servants, both of them pay will be accounted for calculating the cost ceiling of the house. I want to know in this case whether both of them pay will be taken in to account for calculating the amount of granting the HBA (max limit 7.5 lakhs).


    My basic pay is Rs.12230/- .payband-2400/- Gross pay Rs.22827/- Net pay Rs.15915/- . I have 27 Years srvice remaining.How much amount of Max HBA can I claim for constructing a new Home?

  5. Sir, Rate of interest is from 5 to 9.5%. I intend taking maximum loan of 7.5 lakh. What % of interest will I have to pay. What is the way to pay least interest on maximum loan. Any learned colleague may kindly share his experience. Regards

    Kuljeet Arora

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