7th Pay Commission latest news 2023: Another new update has come regarding Dearness Allowance (DA). After increasing DA in March, now it will be announced in a different way in July. The formula for DA Hike Calculation can be changed in July.
Let us tell you, the central employees are currently getting 42 percent dearness allowance. Recently DA has been increased by 4%. Now the employees will get the benefit of increased DA from April salary. But, the next preparation has started. There may be a change in the calculation of dearness allowance to be held in July.
Now the figures of two months of AICPI Index have come, seeing which it seems that dearness allowance will increase by 3 percent. But, experts are assuming that DA may increase by 4% with the data of the coming 4 months. Let us know what is the new update for the employees.
What is dearness allowance?
Central and state government employees get dearness allowance (DA) to improve their cost of living. Dearness allowance is calculated in proportion to inflation. Part of the DA salary structure is kept as an allowance to the employee to improve their standard of living. Dearness Allowance (DA) is given to central employees, public sector employees and dearness relief to pensioners. The same structure is applicable in the states as well.
What is the formula for Dearness Allowance (DA)?
The labor ministry had changed the calculation formula regarding dearness allowance. The Ministry of Labor changed the base year of Dearness Allowance in 2016 and released a new series of Wage Rate Index (WRI-Wage Rate Index). The Ministry of Labor said that the new series of WRI with base year 2016=100 replaced the old series of base year 1963-65.
How is dearness allowance calculated?
The amount of dearness allowance is calculated by multiplying the current rate of dearness allowance of the 7th Pay Commission 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 will be divided by 115.76. The number that comes will be multiplied by 100.
How to calculate how much DA will be received on salary?
For salary calculation under 7th Pay Commission Salary hike, DA will have to be calculated on the basic salary of the employee. Suppose the minimum basic salary of a central employee is Rs 25,000, then his dearness allowance (DA Calculation) will be 34% of Rs 25,000. 34% of Rs.25,000 will be Rs.8500. This is an example. Similarly, people with other salary structure can also calculate it according to their basic salary.
Tax will be levied on dearness allowance
Dearness Allowance is fully taxable. Under the income tax rules in India, separate information has to be given about dearness allowance in Income Tax Return (ITR). Means the amount you get in the name of dearness allowance is taxable and tax will have to be paid on it.
