7th pay commission: In the new year, under the 7th pay commission, the dearness allowance will be calculated with the new formula. Apart from this, the central employees will also have to pay tax on the dearness allowance received. Actually, the Ministry of Labor has changed the formula of calculation regarding dearness allowance.
New Delhi: 7th pay commission: An important information related to DA Hike has come out for the employees working for the Central Government. Actually the thing is that the government has created a new calculation formula for the dearness allowance to increase for the next year. Apart from this, some other important changes can be seen by the government.
Labor Ministry has changed the tax formula
In the new year, the dearness allowance will be calculated with the new formula under the 7th pay commission. Apart from this, the central employees will also have to pay tax on the dearness allowance received. Actually, the Ministry of Labor has changed the formula of calculation regarding dearness allowance.
Changes in the base year of DA Hike
The Labor Ministry had changed the base year of dearness allowance in 2016. A new series of Wage Rate Index has been released. According to the Labor Ministry, the new series with base year 2016=100 in the 7th Pay Commission will replace the old series with base year 1963-65.
This is how DA Hike will be calculated
Under the 7th Pay Commission, the amount of Dearness Allowance (DA Hike) is calculated by multiplying the current rate of Dearness Allowance with the Basic Pay. The current rate of percentage is 12%, if your basic pay is Rs.18000 DA (18000 x12)/100. Dearness allowance percentage = Average of CPI of last 12 months-115.76. Now whatever comes will be divided by 115.76. The number that comes will be multiplied by 100.
Tax will have to be paid on dearness allowance
Dearness Allowance is fully taxable under the 7th Pay Commission. Under the income tax rules in India, separate information about dearness allowance has to be given in the income tax return. You will have to pay tax on the amount you get in the name of Dearness Allowance (DA).
