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Central Employees: Big news! DA calculation formula will change in the new year, now TAX ​​will have to be paid on dearness allowance

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DA Hike News: Important news for central employees. There is a latest update on DA calculation. There will be an increase in dearness allowance in the new year, but in a new way. Not only this, now central employees will also have to pay tax on DA Hike.

According to media report, the Ministry of Labor and Employment has changed the formula of calculation regarding Dearness allowance. Let’s know the latest updates.

Know what has changed

It is noteworthy that earlier in the year 2016, the Ministry of Labor had changed the base year of DA Hike. A new series of Wage Rate Index (WRI-Wage Rate Index) has been released by the department. According to the information given by the Ministry of Labour, now in the 7th Pay Commission, the new series with base year 2016 = 100 will replace the old series of base year 1963-65, according to the news of Zee Business. That is, there has been a change in the formula.

Now how will the calculation be done?

Actually, under the Seventh Pay Commission, the total dearness allowance is calculated by multiplying the current rate of Dearness Allowance with the Basic Pay. Accordingly, on the basis of the current rate of 12%, if your basic salary is 20 thousand, then DA is (20,000 x12)/100. Dearness allowance percentage = Average of CPI of last 12 months-115.76. Now dividing this amount by 115.76, the result obtained will be multiplied by 100. And then this will be your dearness allowance. Let us tell you that there is 38% dearness allowance under the 7th Pay Commission.

Tax will have to be paid on DA Hike

Significantly, under the 7th Pay Commission, tax will have to be paid on Dearness Allowance. Detailed information about dearness allowance will have to be given in the Income Tax Return. Accordingly, you will have to pay tax on Dearness Allowance (DA).

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