3% DA/DR hike soon for employees and pensioner, see the effect on Salary, Pension, NPS Contribution, Transport Allowance, TDS etc.

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3% DA/DR hike soon for employees and pensioner, see the effect on Salary, Pension, NPS Contribution, Transport Allowance, TDS etc.

3% DA/DR hike soon for employees and pensioner, see the effect on Salary, Pension, NPS Contribution, Transport Allowance, TDS etc. A few days ahe

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3% DA/DR hike soon for employees and pensioner, see the effect on Salary, Pension, NPS Contribution, Transport Allowance, TDS etc.

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A few days ahead of the upcoming festive season, Central government employees and pensioners are in for a increase in monthly perks again. This time the central government employees and pensioners are likely to receive another hike in dearness allowance (DA) and dearness relief (DR). View: Dearness Allowance and Dearness Relief from July 2021 confirm to be 31% with 3% hike

The decision will come after the Central government recently restored the dearness allowance and dearness relief of employees & pensioners respectively. The DA/DR was restored from 17% to 28% by the Central government, with the hike applicable from the salary of July 2021 onwards.

With this increase House Rent Allowance (HRA) has already been increase and employees receiving this allowance has been benefitted with increased HRA. Now, there could be another good news for Central government employees and Pensioners. View: House Rent Allowance (HRA)- Effective rate w.e.f. 01.07.2021: FinMin clarifies that no separate order is being issued

The Centre could soon announce a further 3% hike in the DA and DR. With the calculated hike, the DA will be increased to 31% of the basic salary.

Employees unions are also expecting that the government is likely to make the official announcement soon. AICPI data also suggests that DA is payable at a 31% rate, as the index for June 2021 increased by 1.1 points, reaching 121.7. View: All India Consumer Price Index for Industrial Workers for June, 2021 increased by 1.1 points and stood at 121.7

The hike in DA, which will be for the first half of 2021, is expected to be announced in this month. However, there hasn’t been much update on when the government is actually planning to announce the increase in DA.  The increased DA, if announced in this month, can come with the salary of October.

How to calculate the DA hike?

If the government increases dearness allowance by 3%, then DA will be fixed at 31% of the basic salary. So, for calculating the DA hike, Central government employees will need to find 3% or 31% of their basic pay to calculate the hike and total DA amount, respectively.

For instance, if an employee’s basic pay is Rs 20,000, then 3% of the salary would be Rs 600. So, the employee will receive Rs 600 more. Overall DA at 31% would be Rs 6200 in this scenario.   Similarly Pensioners will be benefitted with this increase be calculated on basic pension.

Increase in Transport Allowance:

Central Govt employees are getting transport allowance to compensate to attend office on daily basis.  The DA is also being given on transport allowance.  The employees will the a considerable hike in Transport Allowance due to increase in Dearness Allowance rate.

Deduction for NPS and Income Tax:

There is not only hike and bonanza, some sector of employees will pay some part of increased money back to Govt. account in form of NPS Contribution and Income Tax (TDS).    Central Govt. Employees in NPS are being subscribe 10% of Basic Pay+DA, back as NPS employee contribution.  This increase in DA will increase their NPS subscription.

Source: Media

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