7th Pay Commission: Another DA Hike Likely in July; New Formula, Calculation Here
7th Pay Commission Latest Update: Dearness Allowance is fully taxable. Under the income tax rules in India, separate details need to be given about dearness allowance in Income Tax Returns (ITR).
7th Pay Commission Latest Update: Though nothing has been confirmed as of now, speculations are rife that the Centre may announce another Dearness Allowance (DA) hike in July. Experts are assuming that DA may increase by 4% with the data of the past four months.
However, the government might implement a new formula for the expected DA hike, said fresh reports which come days after Union Minister Anurag Thakur announced a 4% hike in dearness allowance for over 50 lakh Central government employees. Following the increase in accordance with the recommendations of the 7th Central Pay Commission, the DA now stands at 42%.
From this month, i.e, April, the employees will get the benefit of increased DA.
7TH PAY COMMISSION: NEW FORMULA FOR DA HIKE IN JULY
Zee Business reported that the Labour Ministry revised the calculation formula for 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 Index). Labor Ministry said that the new series of WRI with base year 2016=100 replaced the old series of the base year 1963-65.
7TH PAY COMMISSION: HOW TO CALCULATE DA
The 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.
WILL TAX BE LEVIED ON DEARNESS ALLOWANCE?
Dearness Allowance is fully taxable. Under the income tax rules in India, separate details need to be given about dearness allowance in Income Tax Returns (ITR).
WHAT IS DEARNESS ALLOWANCE?
Dearness Allowance is a component of the salary of government employees and pensioners that is aimed at compensating them for the increase in the cost of living as a result of inflation. The allowance is revised periodically twice a year -- in January and July.
However, the DA is not the same for every government employee across India. It can differ significantly based on job location, department and seniority among other things. DA is completely taxable for salaried workers.
Source: ET NOW
