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Home Personal Finance DA Hike New Formula: Big news for central employees! A new formula...

DA Hike New Formula: Big news for central employees! A new formula can be implemented to increase DA.

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Great news for central employees! Government is going to give the benefit of 3 allowances simultaneously

DA Hike New Formula: This time the DA can be increased by 4 percent from the government side. It is being claimed in the media report that this time a new formula can be implemented by the government to increase the DA.


7th Pay Commission Latest Update: If you or someone in your family is a central government employee, then this news is useful for you. Dearness Allowance, which will be implemented from January 1, has been announced by the government in March. After this, the next dearness allowance is to be implemented from July by the Modi government. It is possible that an announcement regarding this will be made by the government in the month of September.

This time also an increase of 4 percent is possible

Experts are hopeful that the government will announce DA on the basis of AICPI index data from January to May. This time also, DA can be increased by 4 percent from the government side. It is being claimed in the media report that this time a new formula can be implemented by the government to increase the DA. After the January DA hike under the 7th Central Pay Commission, the DA of the employees has increased to 42%.

Changes in the method of calculation of dearness allowance!

Sources claim that this time the Labor Ministry has changed the calculation of dearness allowance. The ministry changed the base year of dearness allowance in 2016 and released a new series of Wage Rate Index (WRI-Wage Rate Inde). The Labor Ministry said that the new series of WRI with base year 2016=100 replaced the old series of base year 1963-65.

How will it be calculated

The dearness allowance of the 7th Pay Commission is calculated by multiplying the current rate with the basic pay. The current rate of percentage is 12%, if your basic pay is Rs.56,900 DA (56,900 x12)/100. Dearness Allowance Percentage = Average of CPI of last 12 months – 115.76. Now, whatever comes up is divided by 115.76. The number that will come will be multiplied by 100.

Will there be tax on dearness allowance?

Dearness Allowance is fully taxable income. Under the income tax rules in the country, separate information about dearness allowance has to be given in the Income Tax Return (ITR).

What is Dearness Allowance?

Dearness allowance is a part of the money received by government employees and pensioners as salary. Its purpose is to compensate for the rising cost due to rising inflation. There is a provision by the government to increase the dearness allowance of central employees twice a year (January and July). The DA of government employees is not the same across the country. It may vary on the basis of job location, department and seniority among other things.

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