The announcement was made by the central government about the 3% hike in DA for the employees of the Central Government. From 1st July 2024, this increase is done. Prime Minister Narendra Modi confirmed this increment in their Cabinet Meeting which was held on Wednesday. The rate of the DA will increase from 50% to 53%. The financial boost will be given to the government workers and retirees.
One creator employee and pensioners will benefit from this hike. This decision comes at the very right time as inflation purely affects household work. To reduce the inflation effect this allowance is given to the government workers.
IMPACT ON PENSIONERS
The pensioners also get an increment of 3% into their dearness Relief (DR). This is given to provide them with financial relief from the effect of inflation. Over the two years, the DR is also revised as DA. It takes place in January and July. In March 2024, there will be an increment of 4% which increase the DA up to 50%.
How much more will the employees receive?
One question arises mainly, that how much of the extra money will get received by the employees into this month. Like, if the employees get the salary of Rs.30,000 per month and Rs.18000 as the basic pay then they will get the Da of the Res.9000 currently. With the new 3% DA, the DA will get increased upto Rs.9540 means that Rs.540 will added per month. The employees getting the high wages have a high increment into the DA.
How DA is taxed
The DA is taxable and the employees declared it as the income part. The DA is added to the basic salary for the individual’s salary and taxed under the “Income from Salary” section. When calculating the retirement benefits the DA is also factors like provident fund contributions or pensions.
The DA is a fixed percentage of the salary for the govt employees which will get revised twice every year as per the inflation. Like other allowances, it is fully taxable. It influences the tax calculation for retirement benefits.
DA hike in other states
DA hikes are announced in various stages now. From 1st October Chattisgarh has a 4% increment into the DA. About 3.9 lakh employees will get benefits from this decision of Chief Minister Vishnu Deo Sai.
Rajasthan also increased the 4% hike from September. The total DA is now 46% in Rajasthan. Similarly, the 4% hike is also announced by Himachal Pradesh in September.
The hikes into the DA take place due to the inflation effect on households across the country. With the upcoming festivals, the public sector employees will also get hope for the payout increment.
How the DA is Calculated?
On the All India Consumer Price Index (AICPI), the DA is purely based. It tracks the living cost of the person. With the increment into the AICPI, the DA percentage is calculated over 12 months. The DA is revised every six months. After the effective dates, the govt also announces a few changes.
DA Calculation
(Average of All-India Consumer Price Index (Base Year 2001=100) for the previous 12 months – 115.76) / 115.76) x 100 = Dearness Allowance Percentage.
Employees in the central public sector
The Dearness Allowance Percentage is calculated as follows: (Average of All-India Consumer Price Index (Base Year 2001=100) – 126.33) / 126.33) x 100.
The DA has raised by 4% into March 2024 which will increase up the 50% of the basic pay. To reduce the effect of inflation this increment takes place. With this, the employees and pensioners will get relief from the rising amount of the necessary goods and services. Now this increase has reached up to 53% to maintain the employee’s standard of Living.
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