Dearness Allowance (DA) & DA Types In Employee’s Salary

By | January 15, 2022

Al Information on Dearness Allowance (DA) & DA Types In Employee’s Salary

Cost of living adjustment is also known as dearness allowance is given to public employees and pensioners as a compensatory allowance. DA is applicable to every employee working and being paid in India

Dearness Allowance

DA was previously known as Dear Food Allowance and is later named as Government employees DA. According to Consumer Price Index number DA is added to employees salaries on a percentage basis quarterly

Based on employees’ organization of work two types of DA are applicable for employees. Industrial DA or Central DA as named is variable

Industrial DA

For the employees of Public sector enterprises, Industrial Dearness allowance is applicable on employee salaries According to the Consumer Index Number announced within every 3 months it is revised.  From this announcement made Central PSU’s Employees get maximum benefit

Central DA

For the Central Government employees, Central DA or Variable DA is revised every six months. Keeping in view the previous Consumer Price Index and considering the past 6 months DA the CDA is announced

According to the new figure announced to be implemented and based on consumer, value DA is calculated as

Rates Calculation CDA

From the basic employee salary, DA is calculated. Its calculation is based on pre defined formula but it is revised by the government. Revision may be based on location

Cost of living directly interlinks to DA It is obvious that employees living in cities and rural areas have a huge difference in their style of living

For Banks and Insurances, IDA rates are different based on the revisions. Here you can check the IDA for public sector banks and insurance employee IDA

Dearness Allowance News

08.03.2021 8%DA and DR for central government employees and pensioners are to be announced by the central government from April 2021and the total would be 25% At enhanced rates, PSU IDA may be paid in regular from 01.07.2021

For the employees working in private sectors is DA applicable?

DA is not applicable to employees working in the private sector in India. For a certain defined rate of percentage, DA is applicable only for government employees and pensioners Consumer Index price impacts the DA

Is DA included in the basic salary of the employee?

DA is a component of an employee’s basic salary. DA is more or less 12%of the basic salary of the employee According to the current date, 50% of the basic salary of employees differ on employees area of interest

When DA is given to the pensioners?

Whenever a pay commission is released or enforced  DA for the public sector pensioners is announced the Same percentage is added to pensioners account as the DA get revised for employees

Is the process to calculate DA And HRA?

Both HRA and Da are the components of employees salary Both the allowances facilitate the employees but the method to calculate CRA and DA is completely different

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