As a central government employee, you are most likely aware of the importance of the Dearness Allowance (DA) in your compensation structure. The DA is a dynamic element that adjusts to the ever-changing cost of living. The 7th Central Pay Commission has made provisions for increasing the allowances when the DA crosses 50%. However, we want to know what happens when the DA reaches the critical 50% touch point, and how this increased DA impacts your other allowances and financial benefits as a central government employee.

In this article, we will give the answers to the raised questions, so stay tuned with us till the end. 

List of Allowances that will increase after DA hike to 50%?

When DA reaches 50% then the other allowance also changes/revised as per the recommendation of the 7th pay commission. The other allowance that gets revised is given below:

• House Rent Allowance
• Children Education Allowance
• Children's Education Allowance to Divyang Child
• Hostel Subsidy
• Special Allowance for Child Care for Women with Disabilities
• Gratuity Ceiling
• Dress Allowance
• TA on Transfer (Transportation of Personal Effects)
• Mileage Allowance for Own Transport
• Daily Allowance

House Rent Allowance (HRA) 

The rates for HRA had been revised to 27%, 18%, and 9% of Basic Pay in X, Y, and Z cities when DA crossed 25%. Additionally, HRA rates would have been revised to 30%, 20%, and 10% of basic pay in X, Y, and Z cities when DA reaches 50%. These allowances have been revised as per the 7th CPC recommendation. No separate order is required to revise this allowance as the government has already accepted the recommendation.

House Rent Allowance

The HRA percentage will increase based on the table below when DA reaches 50%.

Children Education Allowance

The Children's Education Allowance will be increased by 25% every time the Dearness Allowance (DA) reaches 50%.

CEA for Divyang Child

Every time DA reaches 50%, the Children's Education Allowance for Divyang Child will be increased by 25%.

Hostel Subsidy

The subsidy for hostels will be increased by 25% each time the Dearness Allowance (DA) reaches 50%.

Special Allowance for Child Care for Women with Disabilities

Special Allowance for Child Care for Women with Disabilities will be increased by 25% every time DA reaches 50%.

Gratuity Ceiling

Whenever the Dearness Allowance (DA) increases by 50%, the Gratuity Ceiling will be raised by 25%.

Dress Allowance

The Dress Allowance categories' rates increase by 25% whenever DA rises by 50%.

TA on Transfer (Transportation of Personal Effects)

When the DA reaches 50%, the rates listed below will be increased by 25%.

Mileage Allowance for Journey by Roads

If rates are not specified by the Directorate of Transport, the Mileage Allowance for own Transport should be increased by 25% when DA exceeds 50%.

Daily Allowance 

The rates for reimbursement of the following expenses will increase by 25% when DA rises by 50%.

Reimbursement of Hotel Charges 

For claims up to level 8, the ceiling amount may be paid without the need for vouchers, but only against self-certified claims. The self-certified claim should specify the duration of stay, the name of the residence, and other relevant details. 

Moreover, for stays in Class 'X' cities, the maximum amount for all employees up to Level 8 is Rs. 1,000 per day, but only if relevant vouchers are produced. The maximum reimbursement for hotel expenses will increase by 25 percent whenever DA increases by 50 percent.

Reimbursement of Traveling Charges 

For levels 8 and below, you can get reimbursed for staying accommodation charges without having to produce vouchers, as long as you self-certify your claim and mention the period of travel, vehicle number, etc. The claim amount can be paid up to the ceiling limit. 

For levels 11 and below, the ceiling limit will increase by 25% whenever the DA (Dearness Allowance) increases by 50%. 

If you travel on foot, you can get an allowance of Rs. 12/- per kilometer traveled on foot, in addition to your other allowances. This rate will also increase by 25% whenever the DA increases by 50%.

Reimbursement of Food Charges

There might be no separate reimbursement of meal bills. Instead, you will receive a lump sum amount as per the table below. Since the idea of compensation has been performed away with, no vouchers might be required. 

This methodology aligns with that followed by Indian Railways at present, with suitable enhancement of rates. It means that you will receive a fixed amount of money to cover your food expenses, which will increase by 25 percent whenever DA increases by 50 percent.

Frequently Asked Questions

What if DA is more than 50%? 

When the Dearness Allowance (DA) reaches 50 percent, other related allowances such as house rent allowance, daily allowance, gratuity ceiling, and hostel subsidy will also increase. This is because these allowances are connected to the DA, and as the DA increases, they also increase.

When DA will merge with basic pay?

The pay commission rule states that once the DA reaches 50%, it merges with the basic salary and starts calculating from zero.

What is the difference between DA and HRA? 

DA (Dearness Allowance) is a cost-of-living adjustment for public sector employees, while HRA (House Rent Allowance) is a component of an employee's salary that assists them in meeting their housing needs.

When Is the DA revised for the employees?

DA is revised biannually based on the cost-of-living index.

Is DA taxable?

Dearness Allowance (DA) is taxable income and is included in the total income of an individual. It follows the same taxation rules as other salary components. If received from an employee's salary, it forms gross income.