DA hiked by 4 Percent (Photo Credit: Pixabay)
The Union Cabinet on Friday approved 4 per cent hike in dearness allowance (DA) to 21 per cent for central government employees, costing the exchequer an additional Rs 14,595 crore. Briefing the media I&B Minister Prakash Javadekar said the Cabinet had approved 4 per cent hike in DA to 21 pc for 48 lakh govt employees, 65 lakh pensioners. He further said the government will incur Rs 14,595 crore additional expense on account of this hike.
The Dearness Allowance, also known as Dearness Relief is determined by the rise in inflation rate and price rise of important commodities. Earlier, the DA was due for central government employees and now it has been paid accordingly.
The Dearness Allowance (DA) was already due for employees of the central government that was in effect from January 1, 2020, said the government. As per the government, the DA will be paid accordingly to the employees of central government. Earlier, in the month of October, 2019, the DA was hiked from 12 per cent to 17 per cent by the government. The Dearness Allowance is determined according to the basic pay of an individual’s salary.
It is to note that HRA and DA are two completely different terms and should not confused with one another. HRA and DA fall under different Income Tax policies. HRA is offered to private and public sector employees while only government employees are entitled for Dearness Allowance (DA). Salaried persons can get tax exemptions against the HRA. However, no tax rebate is available for the DA. EPF (Employee Provident Fund) is another facility, which is offered to employees of private and public sector employees.