DA Hike: There is good news for government employees. The wait for the Dearness Allowance (DA) hike for July-September will soon be over.
According to reports, the Narendra Modi government may announce the next DA hike (dearness allowance hike) in the first week of September, which is likely to be at least 3 percent.
The AICPI index has seen a huge jump of 1.5 points. Due to this, the dearness allowance score has also jumped.
Actually, according to the Consumer Price Index of Industrial Workers (CPI-IW) recently published by the Labour Bureau, a branch of the Ministry of Labour, dearness allowance for central government employees is likely to increase to 53 percent, which is currently 50 percent.
If the DA increases, some other components of the salary of employees including HRA will also increase. Dearness allowance is given to government employees, while dearness relief (DR) is given to pensioners.
How much will the salary increase after the DA increase
The salary that is formed after adding grade pay to the basic salary is multiplied by the rate of dearness allowance. The result is called Dearness Allowance (DA). That is, (Basic Pay + Grade Pay) × DA % = DA Amount
Based on 50 thousand: Suppose the basic salary is Rs 50 thousand. On taking out 53% of Rs 50 thousand, it becomes Rs 26500. On adding all this, it becomes Rs 76,500.
That is, now the salary will increase to Rs 76500. Whereas currently, according to 50 percent DA, Rs 75000 is being received. In this sense, there will be an increase of Rs 16500 (76500-75000 = 1650).
Based on 25 thousand: Suppose the basic salary is Rs 25 thousand. On taking out 53% of Rs 25 thousand, it becomes Rs 13250.
On adding all these, it becomes Rs 38,250. Whereas if we now look at the basic salary of Rs 25000, then as per 50% DA, the total salary becomes Rs 37,500. That is, if DA increases by 3%, there will be a benefit of Rs 7500 (38,250-375000 = 750).
How much will pensioners benefit from a 3% DR hike
With the estimated 3% increase in Dearness Relief (DR), Central Government pensioners will also get an increase in their monthly pension.
Similar to Dearness Allowance (DA) for employees, DR is also a component of pension, which aims to provide relief from inflation.
As of now, if someone’s basic pension is Rs 45000 then with 50% DR, he gets a dearness relief of Rs 22,500. With a 3% increase in this, it will increase to Rs 23,850. This means that the pension will increase by Rs 1350 every month.
DA based on CPI-IW data
The amount of increase in DA and dearness relief (DR) is decided by the central government based on the all-India CPI-IW data.
The AICPI-IW index scores between January and June 2024 have decided how much dearness allowance employees will get from July 2024.
The final figures have been released. The June AICPI index has seen a jump of 1.5 points. It was at 139.9 points in May, which has now increased to 141.4.
The dearness allowance score has increased to 53.36. The CPI-IW data indicates that this time the DA will increase by at least 3 percent.
Dearness Allowance is taxable
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 you have to pay tax on it.