Central Govt Employees Can Expect Dearness Allowance Hike Soon

The Central Government employees might soon receive revised Dearness Allowance (DA) at higher rates. These employees are supposed to receive DA from 1 July 2021. In a written reply, the Union government has confirmed to the Rajya Sabha that when a decision about releasing the future DA instalment is made, the DA rates effective from 1 January 2020, 1 July 2020 and 1 January 2021 will be restored, respectively.

Central Government employees receive DA of 17%; this DA level came into effect starting July 2019 with a revision due from January 2020. However, the revision in January 2020 and consequent two other revisions was deferred due to the pandemic.

The Central Government had fixed three instalments of Dearness Relief (DR) and DA and to the central government employees and pensioners due from 1 January 2020, 1 July 2020 and 1 January 202 due to the COVID-19 pandemic.

The Minister of State in the Finance Ministry, Anurag Thakur, mentioned that the earlier three rates would be restored prospectively. Rates will also be included in the cumulative revised rates effective from 1 July 2021. This translates into the revised DA rate being higher than the one which was decided last year.

The Minister of State in the Finance Ministry also mentioned that the fixed DA and DR instalments had assisted the government in saving Rs 27530.08 crore. This amount will help bridge the economic impact of the pandemic.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

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