What is the formula for dearness allowance?

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What is the formula for dearness allowance?

The formulae for calculating dearness allowance are as under: For central government employees: DA\% = ((Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76)100 For central public sector employees: DA\% = ((Average of AICPI (Base Year 2001=100) for the past 3 months -126.33)/126.33)100 Here.

What percentage of salary is dearness allowance?

Ever since the revision of the calculation formula, the DA for public sector and central government employees has been consistently rising. Presently, it stands at 50\% of the basic salary.

How is Da calculated for central govt employees?

How is Dearness Allowance (DA) calculated? The DA is revised two times a year between January and July. The Dearness Allowance is calculated by multiplying the current rate of dearness allowance by the base wage.

What is dearness allowance with example?

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DA is calculated based on their basic salary and the DR is calculated based on their basic pension. For example, if an employee’s basic salary is 18000 and if a pensioner’s basic pension is 9000, then the calculation of DA and DR will be as follows: Basic Salary: 18000 x 21\% = 3780. Basic Pension: 9000 x 21\% = 1890.

How is basic DA and HRA etc calculated?

The amount of tax deduction that can be claimed will be the least of the following:

  1. (Actual rent paid) – (10\% of the basic salary) = Rs. 12,000 – (10\% of Rs. 23,000) = Rs. 9,700; or.
  2. Actual HRA offered by the employer = Rs. 15,000; or.
  3. 50\% of the basic salary = 50\% of Rs. 23,000 = Rs. 11,500.

Is dearness allowance and special allowance same?

Special allowances, as mentioned, vary widely across companies. After all existing overheads- including conveyance and dearness allowances, LTA and HRA, among others, are extinguished, the remaining amount is treated as a unique allowance. This sum does not come under the purview of any overheads.

What is the difference between dearness allowance and dearness pay?

Difference Between DA and HRA DA or dearness allowance is calculated as a specific percentage of the basic salary which is then added to the basic salary along with other components like HRA (House Rent Allowance) to make up the total salary of an employee of the government sector.

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How is gratuity calculated if da dearness allowance is not defined in CTC?

To calculate the gratuity payable to employees who are not covered under the Act, the formula applicable is (15 x salary last drawn x period of employment) divided by 30. The last drawn salary here can include basic salary, dearness allowance and commission on sales.

Is special allowance considered as DA?

Is HRA part of dearness allowance?

DA or dearness allowance is calculated as a specific percentage of the basic salary which is then added to the basic salary along with other components like HRA (House Rent Allowance) to make up the total salary of an employee of the government sector.

How is gratuity calculated without dearness allowance?

For employees whose employer is not covered under the Gratuity Act, the gratuity amount would be calculated as per the half-month salary on each completed year of service. The formula is: (15 * Your last drawn salary * the working tenure) / 30.

What is the difference between special allowance and dearness allowance?

The special allowance is included in the total salary. These allowances are based solely on an employee’s basic pay. After deducting all existing allowances, such as dearness and transport allowances, HRA, and LTA, among others, the remaining amount is recognized as a special allowance.

What is the formula for calculating Dearness Allowance?

After 2006, the formula for calculating dearness allowance has changed and currently DA is calculated as follows, For Central Government employees: Dearness Allowance \% = ( (Average of AICPI (Base Year 2001=100) for the past 12 months -115.76)/115.76)*100 For Central public sector employees:

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When is Dearness Allowance (DA) revised for employees?

The Pension Rule 50A grants public sector pensioners and family pensioners DA in order to compensate for inflation or price rise. When is Dearness Allowance (DA) revised for employees? DA is reviewed biannually, once in every 6 months on the basis of the cost-of-living index. When is Dearness Allowance merged with the basic salary of an employee?

Who will get a 5\% hike in Dearness Allowance (DA)?

Near about 50 lakh government employees and 65 lakh pensioners will now be benefitted with the recent hike in Dearness Allowance (DA) which has been announced by the Government of India. The Union Cabinet has recently announced a hike of 5\% in the DA for employees and pensioners.

How deardearness allowance for central government employees is calculated?

Dearness Allowance for Central Government Employees was continued to be calculated after implementation of 7th Pay Commission based on consumer price index with Base 2001=100 till August 2020. From the month of September 2020, Govt replaced CPI with base 2001=100 with new consumer price index with base 2016=100.