What is the full form of DA?
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What is the full form of DA?
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The full form of DA is Dearness Allowance or cost of living allowance. Dearness Allowance an amount paid to Government employees, public sector employees, and pensioners. It started after the second world war and was then known as the Dear Food Allowance.
DA is calculated as a specific percentage of the basic salary of employees. The amount varies from one town to another town because the cost of living is not the same in every place. It helps employees to manage the increasing price.
The DA amount is taxable with a salary and it is mandatory to declare in the filed return.
Types of Dearness Allowance
There are two type of DA allowance:
Variable Dearness Allowance(VDA)
It is applicable to central government employees and it is revised every six months as per the consumer price index.
Industrial Dearness Allowance(IDA)
It is applicable to Public sector employees and it is revised every three months as per the consumer price index.
Dearness Allowance calculation
For Central Public Sector Employees
% of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 3 months -126.33)/126.33} x 100
For the employees of Central Government
% of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 12 months -115.76)/115.76} x 100
