Dearness Allowance hiked to 50%: Top things central government employees should know about DA hike, change in HRA | India Business News


Increase in dearness allowance of 7th Pay Commission: The government has increased the latest increase central government employees'Dearness Allowance (DA) up to 50%. This means that his DA will increase by 4%. Similarly, pensioners will also see their dearness relief (DR) increased from 4% to 50% to help offset the increase in prices.
A Press Information Bureau (PIB) statement issued on March 7, 2024, noted that the combined impact on the government's finances due to these increases will be Rs 12,868.72 crore annually. This will benefit approximately 49.18 lakh central government employees and 67.95 lakh. Pensioner.
According to ET, here are six key points that central government employees should know about this latest hike:

increase in basic salary

From January 1, 2024, dearness allowance rates for central government employees will increase from 46% to 50% of the basic pay.
basic salary
In the updated pay structure, basic pay refers to the pay earned at the level specified in the pay matrix, following the recommendations of the 7th Central Pay Commission (CPC), accepted by the government. However, this does not include additional types of pay such as special pay, as mentioned in the office memorandum.
Read this also DA increased by 50% – New take home pay, HRA and gratuity benefits for central government employees, pensioners explained

different elements

Dearness Allowance will remain a separate component of compensation and will not be considered as part of the salary governed by FR 9(21).
rounding off payments
Payments related to dearness allowance which include fractions of 50 paise or more will be rounded to the next whole rupee, while fractions of less than 50 paise will be ignored.
outstanding payment
The outstanding dearness allowance will not be distributed before the salary disbursement date March, 2024.

Applicability to other employees

These instructions will also apply to civilian employees drawing salaries from the Defense Services Estimates, and the related expenses will be accounted for under the relevant category within the Defense Services Estimates. However, separate orders will be issued by the Defense Ministry for Armed Forces personnel and the Railway Ministry for Railway employees.

impact on salary

Consider a central government employee with a monthly basic salary of Rs 45,700. Earlier, at the Dearness Allowance (DA) rate of 46%, his DA was Rs 21,022. After the recent increase of 50 percent in DA, now his DA will be Rs 22,850. Due to this, his DA has increased by Rs 1,828.
Read this also 7th Pay Commission DA hike: Central government employees and pensioners eyeing 4% hike; Check salary calculation, probable date and more

Salary component affected by DA increase

As Dearness Allowance (DA) reaches 50%, central government employees can expect an increase in various components of their salary, including House Rent Allowance (HRA), daily allowance and other allowances. In line with the recommendations of the Seventh Pay Commission, this increase will significantly increase the salaries of central government employees.
When Dearness Allowance (DA) reaches 50%, many allowances for central government employees will increase. These include:
a) House Rent Allowance
b) Children's education allowance
c) Special allowance for child care
d) Hostel Subsidy
e) TA on transfer (Transportation of personal effects)
f) Gratuity limit
g) Dress Allowance
h) Mileage allowance for own transport
i) daily allowance

Increase in dearness relief (DR) for pensioners

Let us consider a central government pensioner with a monthly basic pension of Rs 36,100. Earlier, at the dearness relief (DR) rate of 46%, the pensioner used to get Rs 16,606. Due to increase in DR to 50%, now the pensioner will get Rs 18,050 monthly as dearness relief. As a result, his pension will increase by Rs 1,444 per month.

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