7th Pay Commission : Good news has come from the central government for central employees. The wait of central government employees waiting for the increase in Dearness Allowance (DA Hike) for July-September is going to end soon. According to reports, the Narendra Modi government may announce the next DA hike (Dearness Allowance to Hike) in the first week of September, which is likely to be at least 3 percent. There has been a big jump of 1.5 points in the AICPI index. Due to this, there has been a jump in the dearness allowance score as well.
In fact, according to the Consumer Price Index (CPI-IW) for Industrial Workers recently published by the Labor Bureau, a branch of the Ministry of Labor, dearness allowance for central government employees is likely to increase by 53 percent, which is currently 50 percent. If DA is hiked, then some other components of the employees’ salary including HRA will also increase. Dearness Allowance is given to government employees, while Dearness Relief (DR) is given to pensioners.
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DA based on CPI-IW data
The amount of increase in DA and Dearness Relief (DR) is decided by the Central Government on the basis of All India CPI-IW data. The numbers of the AICPI-IW index between January and June 2024 have decided how much dearness allowance the employees will get from July 2024. The final numbers have been released. The June AICPI index has seen a jump of 1.5 points. In May it was at 139.9 points, which has now increased to 141.4. The score of dearness allowance has gone up to 53.36. The CPI-IW data indicates that this time there will be at least a 3 percent increase in DA.
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How much will the salary increase after DA increases?
The salary that is formed after adding grade salary to basic salary is multiplied by the rate of dearness allowance. The result obtained is called dearness allowance (DA). That is, (basic pay + grade pay) × DA % = DA amount
On basic salary of 15 thousand: Suppose the basic salary is Rs 15,000. Taking out 53% of Rs 15,000, it becomes Rs 7950. Adding all of them, it becomes Rs 22,950. Whereas if we look at the basic salary of Rs 15,000 now, then according to 50% DA, the total salary becomes Rs 22,500. That means, if the DA increases by 3%, then there will be a benefit of Rs 400 (22950-22500 = 450).
On basic salary of 25 thousand: Suppose the basic salary is Rs 25,000. 53% of Rs 25,000 gives Rs 13,250. Adding all of them gives Rs 38,250. Whereas if we look at the basic salary of Rs 25,000 now, then the total salary is Rs 37,500 as per 50% DA. That means, if the DA increases by 3%, then there will be a benefit of Rs 7500 (38,250-375000 = 750).
On basic of 50 thousand: Suppose the basic salary is 50 thousand rupees. Taking out 53% of 50 thousand rupees, it becomes 26500 rupees. Adding all of them, it becomes 76,500 rupees. That means now the salary will increase to 76500 rupees. Whereas currently, according to 50 percent DA, 75000 rupees are being received. In this respect, there will be an increase of 16500 rupees (76500-75000 = 1650).
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DA will not be merged in basic
The last 4% DA hike was announced in March this year, but it was implemented from January 2024, taking the dearness allowance to 50% of the basic level. After the DA reached 50% last time, there was speculation that the government could now merge DA into the basic and start afresh with 0% DA. But now the government has confirmed that no such step is being taken. That is, from July onwards, dearness allowance has been counted as before.
Tax is 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 the Income Tax Return (ITR). This means that the amount you get in the name of dearness allowance is taxable and tax has to be paid on it.
Dearness Allowance Calculation
A formula has been given for DA calculation. This is the formula for central government employees –
Dearness Allowance Percentage= (Average of AICPI (Base Year 2001=100) for last 12 months -115.76)/115.76) *100
Now if we talk about dearness allowance of people working in PSU (Public Sector Units), then the method of its calculation is-
Dearness Allowance Percentage=(Average of Consumer Price Index of last 3 months (Base year 2001=100)-126.33))x100.
