7th Pay Commission | Good news for central employees, dearness allowance will be increased soon!

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The Labor Office has released ACIPI data from July 2020 to December 2020. At this time, a 4% increase in dearness allowance for central employees has been fixed.

Before the 2021 budget is presented, the lottery has started for the central government employees.

Mumbai : Before the 2021 budget is presented, the lottery has started for the central government employees. An increase in their dearness allowance (DA) has been announced. The Labor Office has released ACIPI data from July 2020 to December 2020. At this time, a 4% increase in dearness allowance for central employees has been fixed. However, due to the corona virus, the inflation allowance is currently stable. At present the inflation allowance for central employees is 17%. However, in 2019 it was 21%. But due to the Corona epidemic, the central government had postponed the increase till June 2021 (7)th Pay Commission update central government employee DA increase).

Harishankar Tiwari, former president of AG Office Brotherhood and president of Citizen Brotherhood, said inflation would rise by 4% this time. The Central Government amends it from time to time. It is calculated based on the basic salary as a percentage. Currently employees and pensioners are getting separate DAs. According to experts, this DA is fully taxable. That is, the amount received in the name of dearness allowance is taxable.

Differences between DA and HRA

Like dearness allowance, House Rent Allowance (HRA) is also an important component of an employee’s salary. The employer pays this amount to meet the rental needs of his employee. HRA is available to both public and private sector employees. The calculation of DA is based on the percentage of basic salary, which is then combined with the HRA in the basic salary.

This is how DA is calculated

DA is directly related to the All India Consumer Price Index (AICPI). In his formula, the average of AICPI is calculated.

DA% = (Average of ACIPI (Assessed Year 2001 = 100) for last 12 months -115.76) / 115.76) x100
(7th Pay Commission update central government employee DA increase)

Will get 32% DA

According to Harishankar Tiwari, DA will increase from 30 to 32% by June 2021. This will increase the DA payment of central employees by about 15%. The Central Government amends it every 6 months. It is calculated based on the basic salary as a percentage. Currently employees and pensioners are getting separate DAs.

Suspension due to corona

Due to the Corona epidemic, the government has postponed the increase in inflation allowance from 1 January 2020 to 1 July 2021. Also, dearness relief (DR) of pensioners will not increase till July 1, 2021. This decision will save the government a total of Rs 37,000 crore in the financial year 2021-2022.

No arrears of DA!

The Central Government’s order has made it clear that no arrears will be received from January 1, 2020 to June 30, 2021. In July 2021, there will be a decision regarding DA and DR, which will be implemented one by one.

(7th Pay Commission update central government employee DA increase)

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