7th Pay Commission: The Central Government has increased the Dearness Allowance (DA) for its employees by 4 percent. This increase will be considered effective from July 1, 2023. With 4% increase in DA, it has now increased to 46 percent.
7th Pay Commission: The Central Government has increased the Dearness Allowance (DA) for its employees by 4 percent. This increase will be considered effective from July 1, 2023. With the 4% increase in DA, it has now increased to 46 percent. Although the central government revises the allowances every year from January 1 and July 1, the decision is generally announced around March and September-October.
What is dearness allowance and dearness relief?
Dearness allowance is money given to employees as part of their salary to compensate for the increase in inflation in the economy. Whenever inflation increases, it reduces the value of cash. The effect of increasing inflation reduces the purchasing capacity of employees.
Dearness Relief (DR) is money given to pensioners. Whenever DR increases, the money received by pensioners increases. The monthly pension they receive increases. DA is given as a percentage of the basic salary, while DR is given on the pension amount.
How is DA increase calculated under 7th Pay Commission?
In 2006, the Central Government had revised the formula of DA and DR calculation for Central Government employees and pensioners. The government now calculates DA based on the percentage increase in the 12-month average of the All India Consumer Price Index (AICPI) for the period ending June 2022. AICPI stands for All India Consumer Price Index.
How many employees will benefit from the 4% increase?
The DA increase will benefit approximately 48.67 lakh central government employees and 67.95 lakh pensioners. Due to both DA and DR, the combined expenditure on the government exchequer will increase by Rs 12,857 crore annually.
How much salary increase will central government employees get?
If the government has announced a 4 percent DA increase, then how much increase is likely to be in the salaries of central government employees? If someone’s salary is Rs 50,000 per month and his basic salary is Rs 15,000. He currently gets Rs 6,300, which is 42 percent of the basic salary. However, after the 4 percent increase, the employee will get Rs 6,900 per month, which is Rs 600 more than the earlier Rs 6,300. So, if someone’s salary is Rs 50,000 per month and the basic salary is Rs 15,000, his salary will increase by Rs 600 every month.
In the last DA hike in March 2023, the government had increased dearness allowance and dearness relief by 4 percent to 42 percent.
Is there tax on DA?
Dearness Allowance or DA is part of your salary and hence tax is levied as per your slab.
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