The Pension Rule 50.A. Calculation Of The Dearness Allowance. D.A. There are three components that make up VAD. For example, the existing rate of percentage is 12%, if your basic salary is Rs. Since the year 2006, the dearness allowance for employees from the public sector has been continuously growing. Write a program to calculate his gross salary. The union cabinet is expected to take a decision on this matter soon. 7th Pay Commission 7th Pay Commission latest update: Big changes likely in Salary, DA, PF, Gratuity, travel allowance; know details here. Then there are another 55-lakh retired central government employees who are eligible for a pension. Based on this figure, the DA of employees is revised and rolled out. Tip. DA (Dearness Allowance) = 2% to 4% of Basic Salary. From the year 1996, DA has been included to compensate for price rise or inflation in a particular financial year and hence it is revised twice every year, once in January and then in July. According to the Chief Minister, the hike would be effective from 1 January 2020. Dearness Allowance is cost of living adjustment allowance which the government pays to the employees of the public sector as well as pensioners of the same. According to various sources, the increase in DA will benefit around 3.5 lakh employees. The Chief Minister of Odisha announced on February 14th, 2020 a 5% increase in Dearness Allowance (DA) for government employees. After the Second World War, DA component was introduced by the government. If total percentage of literate men is 35 of the total population, write a program to find the total number of illiterate men and women if the population of the town is 80,000. The mandate for the seeding of data with Aadhaar which was a pre-requisite for the purpose of releasing funds has also been relaxed by the Cabinet. in order to compensate for inflation or price rise. Salaried individuals who live in a rented house can claim HRA to … Basic Salary – Definition. The government has recently announced through an office memorandum that it has decided to put the hikes on the dearness allowance (DA) on hold for pensioners and govt employees till the month of July 2021. Dearness Allowance is a major and progressive salary component for the employees of the Indian Government. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Basically, Dearness Allowance is understood as a component of salary which is a fixed percentage of an employee’s basic salary, which aims to hedge the impact of inflation. This has happened over a number of years during which the DA percentage rose steadily in order to hedge the rising inflation. It, therefore, becomes essential for the government to shield its employees from the adverse effects of inflation. So, while the cost of living keeps on rising, Dearness Allowance (DA) is paid by the government to its employees to offset the inflation impact and help them cope up with the rising prices. However, a revision will be put in to effect on July 1st, 2021 and this will also take the previous hikes under consideration. With the new budget, came a lot of new advancements and developments. As per Assessment Year 2017-18, Dearness Allowance is completely taxable for individuals who are salaried employees. It is revised every six months according to the Consumer Price Index to help offset the impact of rising levels of inflation. The formula to calculate the dearness allowance was changed in 2006 by the Government. January 2020. For all the other cities you are entitled to 40 percent of your salary. The pay commission must evaluate and change the salaries of public sector employees based on the various components that make up the final salary of an employee. Presently, DA is calculated as per the following formula: % of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 12 months -115.76)/115.76} x 100, % of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 3 months -126.33)/126.33} x 100. If the employee has been provided with an unfurnished rent-free accommodation, it becomes that part of the salary up to which it forms the retirement benefit salary of the employee, provided that all other pre-conditions are met. Given the current situation, the DA hike for the year 2020 has been put on hold for about 50 lakh Central Government employees. Since D.A. This came as a significant relief for all these beneficiaries as their Dearness Allowance was enhanced from 5% to 7%. What is Dearness Allowance? Calculation of Dearness Allowance (DA) DA Calculation Formula for the Central Government Employees: Dearness Allowance (%) = [(Average of AICPI (With Base Year 2001 = 100) for the last 12 months – 115.76)/115.76] * 100 is not granted to pensioners while they are staying in any place outside India during reemployment. In January 2016, the Dearness allowance rates have reached at 125%. Every subsequent pay commission in India is expected to revaluate the salary of employees of the public sector taking into account the various components of salary. First is the consumer price index, second, the base index and third is the variable DA amount fixed by the government of India. VDA in itself is dependant on three different components as given below. Spearheaded by Indian Prime Minister, Narendra Modi, this move is going to benefit more than 50 lakh Central Government employees and approximately 55 lakh pensioners. is revised by a certain percentage, the pension of the retired employees undergoes revision accordingly. VAD or Variable dearness allowance is the allowance that comes as a result of revision every six months for central government employees. Since, this allowance is related to the cost of living, the Dearness Allowance component differs for various employees based on their location. Which is combined with HRA. The salary is taken for the period the employee occupies the accommodation. In addition to this, the freezing of DA and DR till July 2021 will help the Centre around Rs.37,500 crore and the state Rs.82,500 crore and this amount will be used in helping the government tackle COVID-19 in the state as a stimulus package. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. According to various sources, 40% of the arrear amount between January 1st, 2016 and August 31st, 2017 was disbursed during the financial year 2017-2018. As per an estimate, there are more than 50-lakh central government employees who receive the salary from the government. is granted to a re-employed pensioner depending on the limit of the last drawn emoluments. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing. Every government employee receives DA which is based on a percentage of the basic salary. Yes, D.A. Except for this, in all other cases of reemployment, D.A. This merging results in a significant hike in the salary of the employees. 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