The full form of DA is Dearness Allowance. DA is an amount that companies offer to their employees for regular expenditure. It is a separate part of the basic salary. DA can be used for official expenditure if any occurs by an employee. This expenditure can be traveling, recharging, or any other. DA is given in public as well as in private companies to employees. It is a cost of living which employees generally seek to spend on a daily basis. There is a standard matrix in DA % according to the salary pay scale. This DA also depends upon which city you lived in.
Dearness Allowance is also known as DA. It is an amount that companies offer to their employees for regular expenditure. It is an amount that companies offer to their employees for recurring outlays. DA amount does not hamper the lifestyle of the person as it is not included in salary.
However, Tier I cities will have higher DA comparative to the Tier II or III cities. For Example, Mumbai comes in Tier I, so the DA will be higher here. In the Public sector, this term is also often named a pension. Where pensioners get this amount on a monthly basis. DA is very much important in employee income and plays a vital role. As everyone has planned for the salary like what kind of expenses are going to happen in the particular month. So this DA amount does not hamper the lifestyle of the person.
DA (Dearness Allowance) is the major element in the salary of Government employees. This is an increment that is given twice a year for compensating the price of essential commodities.
Calculation of dearness allowance-:
Dearness Allowance is calculated based on the basic salary of the employee.
Let’s try to understand with an example
if an employee’s basic salary is INR 20000 then the calculation of DA will be as follows: Basic Salary: 20000 x 21% or 20000×0.21 = INR4200
We can say that the Dearness Allowance for him/her is 21 %of him/her basic salary.
There are some guidelines for DA (Dearness Allowances). There are two types of DA one which is given under the terms of employment and the other which is not given under the terms of employment. DA is a fully taxable allowance. In the second world war, Dearness Allowance was introduced and was earlier known as Dear Food Allowance.
Dearness Allowance is a plan for pensioners in India, Bangladesh, and Pakistan. There is a certain percentage to pay basic pension. When the employees demanded wage revision, DA was given in response to the demand. After that, it was linked to Consumer Price Index.
| Term | Full Form |
| DA | Dearness Allowance |
FAQ’s
DA is an amount that companies offer to their employees for the regular expenditure. It is a separate part of the basic salary.
DA is short form of Dearness Allowance.
Dearness Allowance is full form of DA.
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