DA Hike news: Dearness allowance will be calculated from the new formula in the new year. Apart from this, the central employees will also have to pay tax on the DA Hike received.
DA Hike news: Big news has come out for central employees. The matter is related to dearness allowance. That’s why it is important to pay attention. Dearness allowance will now increase next year. But, it is important to know how to calculate it. Because, in the new year, the calculation of Dearness allowance will be done with the new formula. Apart from this, the central employees will also have to pay tax on the DA Hike received. Actually, the Ministry of Labor and Employment has changed the calculation formula regarding Dearness allowance.
Changes in the base year of DA Hike
The Labor Ministry had changed the base year of DA Hike in 2016. A new series of Wage Rate Index (WRI-Wage Rate Index) has been released. According to the labor ministry, the new series with base year 2016=100 will replace the old series with base year 1963-65.
How will DA Hike be calculated?
Under the 7th Pay Commission, the amount of dearness allowance (DA Hike) is calculated by multiplying the current rate of dearness allowance with the basic pay. The current rate of percentage is 12%, if your basic pay is Rs.18000 DA (18000 x12)/100. Dearness allowance percentage = Average of CPI of last 12 months-115.76. Now whatever comes will be divided by 115.76. The number that comes will be multiplied by 100.
Will you have to pay tax on DA Hike?
Dearness allowance is fully taxable. Under the income tax rules in India, separate information about dearness allowance has to be given in the income tax return. You will have to pay tax on the amount you get in the name of Dearness Allowance (DA).
How much benefit do you get?
For salary calculation under the 7th Pay Commission, DA is calculated on the basic salary of the employee. Suppose the minimum basic salary of a central employee is Rs 26,000, then his DA calculation will be 38% of 26,000, which means the total will be Rs 9,880. On the next DA hike, there can be an increase of Rs 910 in the salary every month. If DA increases at the rate of 4 percent and it reaches 42%. This is an example. Similarly, the salary of other central employees will also be different in the 7th CPC Pay Matrix. It can be calculated by looking at your basic salary.
What is Dearness Allowance (DA)?
Dearness allowance is given to the government employees for their living and food. Even after the increase in inflation, there is no difference in the standard of living of the employee, so it was started. This money is given to government employees, public sector employees and pensioners. Dearness Allowance (DA) was first introduced in India in 1972 from Mumbai. After this, the central government started giving dearness allowance to all the government employees.
What are the types of Dearness allowance?
Dearness Allowance (DA Hike) is given in two ways. Industrial dearness allowance and variable dearness allowance. Industrial Dearness Allowance changes every 3 months. This is for the employees working in the Public Sector (PSU) of the Central Government. It is calculated on the basis of inflation rate of Consumer Price Index (CPI). At the same time, the revision of variable dearness allowance is done every 6 months. It is also calculated on the basis of inflation rate of Consumer Price Index (CPI).
How much can DA increase?
DA is expected to increase by 4% in January 2023. With this increase, DA will reach 42 percent. However, it is not yet clear when that will happen. But, it can be announced in March 2023 to be given around Holi. Due to increase in DA, about 50 lakh central employees and 65 lakh pensioners will get its benefit.
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