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7th Pay Commission – Dearness allowance of employees will be calculated with new formula, salary will increase

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7th Pay Commission – If you are an employee then this news is for you. Actually, an update has come from the government for the employees. Under which it is being said that the dearness allowance of the employees will now be calculated with the new formula. Along with this, there will be an increase in the salary of the employees.


Central employees are waiting for DA for the first half of the year. Everyone wants to know that by when the central government will take a decision on dearness allowance and what will be its formula. Today we are going to tell you its complete calculation. At the same time, on the basis of the formula, we will try to understand how much dearness allowance can be increased.

From this year, the calculation of dearness allowance under the 7th pay commission will be done with the new formula. Apart from this, the central employees will also have to pay tax on the dearness allowance received.

Changes in the base year of DA-

Let us tell you, the Ministry of Labor had changed the base year of dearness allowance in 2016. Under which a new series of Wage Rate Index (WRI-Wage Rate Index) has been released. In the 7th Pay Commission, the new series with base year 2016 = 100 will replace the old series of base year 1963-65.

This will be the calculation-

Under the 7th Pay Commission, the amount of Dearness Allowance (DA Hike) is calculated by multiplying the current rate of Dearness Allowance with the Basic Salary. The current rate of percentage is 12%, if your basic salary is Rs.18000 then DA is (18000 x12)/100. Dearness allowance percentage = Average of CPI of last 12 months-115.76. Now divide whatever you get by 115.76. Whatever comes, it will be divided by 100.

Tax will have to be paid on DA also?

Dearness Allowance is fully taxable under the 7th Pay Commission. Under Income Tax in India, separate details have to be given about Dearness Allowance in Income Tax Return. The amount you get in the name of dearness allowance is taxed.

How much will be the benefit?

For salary calculation under 7th Pay Commission, DA is calculated on the basic salary of the employee. Suppose the minimum basic salary of a central employee is Rs 26,000, then his dearness allowance will be 38% of 26,000, which means the total will be Rs 9,880. The next increase in dearness allowance will increase the salary by Rs 910 every month. If DA increases at the rate of 4% and it will reach 42%.

Pravesh Maurya
Pravesh Maurya
Pravesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ businessleaguein@gmail.com
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