DA Rules Change: All You Need to Know About the Latest Dearness Allowance Update for Central Government Employees

  • 2 min read
  • Apr 07, 2023
DA Rules Change, DA News West Bengal

DA News West Bengal: In an important announcement made in March 2023, the Modi government has changed the rules regarding Dearness Allowance (DA) for central government employees. This news is very important for you if you or your family is a central government employee.

Dearness Allowance is part of the salary received by government employees and retirees. Its purpose is to compensate for the increase in costs due to inflation. The government has a provision to increase the allowance for central employees twice a year in January and July.

This year, the government has announced the allowances that will be implemented from January 1. The next allowance will be implemented from July and the announcement is expected to be made in September. Experts hope that the government will announce the DA based on the AICPI data from January to May.

According to media reports, this time the DA is also likely to increase by 4%. However, some claim that the government may implement a new formula to increase DA. the allowance for employees has been increased to 42% after the 7th Central Pay Commission increased the allowance in January.

The method of calculating severance pay has also been changed. The Labor Department has changed the calculation method, changing the base year for dearness allowance in 2016 and issuing a new series of wage rate index (WRI), sources said. The new series of WRI with 2016=100 as the base year replaces the old series with 1963-65 as the base year. The new DA is calculated by multiplying the current rate with the base wage.

The current percentage is 12 percent. For example, if the basic wage is Rs. 56,900, then the allowance would be (56,900 x 12)/100. The allowance percentage is calculated by taking the average of the Consumer Price Index (CPI) for the last 12 months and subtracting it from 115.76. The resulting number is then divided by 115.76 and the resulting number is multiplied by 100.

It is important to note that the Dearness Allowance is fully taxable income. According to the income tax rules of the country, information about allowances must be provided separately in the Income Tax Return (ITR).

Allowance for government employees is not the same throughout the country. It may vary depending on the place of work, department, seniority and other factors. The government has been taking steps to ensure the welfare of its employees and their families by providing them with various benefits and allowances, including DA.

The changes made to the Dearness Allowance calculation and the potential 4% increase in the next allowance are crucial news for central government employees. Keeping an eye on the government’s announcement in September regarding the implementation of the next DA is crucial. The government’s efforts to provide better benefits and allowances to employees should be appreciated and employees should ensure that they provide the correct information about their Dearness Allowance at the time of filing their personal income tax returns.