The federal government has hiked Dearness Allowance (DA) to be paid to the central workers and pensioners, with retrospective impact from January 1, by 3% to 34 %. The DA might be calculated on the idea of the All India Shopper Value Index for the months of 2021. “This enhance is in accordance with the accepted components, which is predicated on the suggestions of the seventh Central Pay Fee,” the federal government stated in a press launch.
Right here is every little thing it’s essential find out about Dearness Allowance:
What’s Dearness Allowance?
Dearness Allowance, or just DA, is among the elements of month-to-month wage paid to public sector workers to be able to compensate them for the rise in the price of residing resulting from inflation.
Revised twice a 12 months
This share is elevated twice a 12 months – in January and July. Because the core operate of the DA is to scale back the affect of inflation, its enhance is decided by the CPI. CPI is the measure of inflation that calculates the costs of products relative to their costs up to now.
DA varies for every worker
It should be famous that the rise in DA shouldn’t be the identical for all authorities workers. It varies enormously on the job location, the job division and the extent of seniority amongst different issues.
DA is a taxable part
Dearness Allowance is totally taxable for people who’re salaried workers.
Dearness Allowance for Pensioners
Dearness allowance paid to pensioners of the central authorities known as Dearness Aid DR. The share of DR is determined in the identical approach as that of DA.
How does the federal government calculate DA?
As per on-line market BankBazaar, right here is the components for calculating DA:
For central authorities workers:
Dearness Allowance % = ((Common of AICPI (Base Yr 2016=100) for the previous 12 months -115.76)/115.76) *100
For public sector (central authorities) workers:
Dearness Allowance % = ((Common of AICPI (Base Yr 2016=100) for the previous 3 months -126.33)/126.33) *100
* AICPI stands for All India Shopper Value Index.
The DA for central authorities workers was earlier calculated primarily based on the buyer value index with the bottom 12 months 2001. The federal government changed it with a brand new client value index with the bottom 12 months 2016 to calculate the DA from September 2020.