ishitaonline Started The Discussion:
hi how do u calculate Dearness Allowance?
Posted 5th July 2005 From India, Mumbai
Hi Ishita

DA is calculated as a percentage of Basic Salary of the person...

It is given on the bases of the Inflation rate which is calculated from CPI (Consumer Price Index) of that geographical area..

You can access the CPI of different cities of india at

and particularly of mumbai at
Posted 5th July 2005 From India, Ahmadabad
Hi Numberuno

In India, specially in the Government sector, the employees are paid at a fixed payscale which needs to be reviewed by "Pay Commission" sitting every 5 years.

Mean while, the employees would get a fixed increament as per the previous "Pay Commission's" recommendation. In this case, to adjust the net salary against the Inflation Rate of the area, the Government gives "Dearness Allawance" [%age of Basic salary] which practically is an increament in their basic salary as everything else is then calculated based on "Basic+DA". i.e. if 20% House Rent on basic is given as allowance, it will then be converted to 20% of "Basic + DA"

The act that has been passed for the purpose is given below...
__________________________________________________ ___________

In exercise of the powers conferred by sub-section (1) of the Section 3 of the All India Services Act, 1951 (61 of 1951), the Central Government after consultation with the Governments of the States concerned, hereby makes the following rules, namely :-

1.Short title and commencement :

These rules may be called the All-India Services (Dearness Allowances) Rules, 1972. They shall come into force on the first day of April, 1972.

2.Definition :

In these rules, unless the context otherwise requires "a member of the Service" means a member of an All-India Service as defined in Section 2 of the All-India Services Act, 1951 (61 of 1951).

3. Regulation of dearness allowance:

Every member of the Service and every officer, whose initial pay is fixed in accordance with sub-rule (5) or sub-rule (6-A) of rule 4 of the Indian Administrative Service (Pay) Rules, 1954 or sub-rule (5) of rule 4 of the Indian Police Service (Pay) Rules, 1954 or sub-rule (6) of rule 4 of the Indian Forest Service (Pay) Rules, 1968, shall be entitled to draw dearness allowance at such rates, and subject to such conditions, as may be specified by the Central Government, from time to time, in respect of the officers of Central Civil Services, Class I.

4.Interpretation :

If any question arises as to the interpretation of these rules, it shall be referred to the Central Government for decision.

(No. 1/13/70-AIS(II), dated the 18th March, 1972).


1Substituted vide Department of Personnel & A R Notification No. 22/1/74-AIS(II), dt.28thJanuary, 1975.
Posted 6th July 2005 From India, Ahmadabad
Hi to all

What is DA?

Dearness Allowance is a kind of Allowance given to worker to bear the cost of living due to inflation, so that he / she can at least live his life in "some comfort"

DA is a temperary entity of a salary, it was introduced in 50's or 60's (I don't remember date) and said to "taken back" in future when the price of general commodites will decrease, it has never taken back becuase of the rising price of general commodites year after year. :)
Posted 6th July 2005 From India, New Delhi
actually Basic pay is an amount the organisation paying for an employee for his work according to his merit. year after year for his experience increment is also given and basic pay is enhanced.
house rent allowance is payable only for the reason that the particular employee migrated and placed somewhere only because of his emloyment.
dearness allowance is the concept derived from socialistic pattern of our politics after independance. just to compensate for the commodity price increase and calculated according to price index actually published by the statistical department after taking into consideration of ite important commodities price. if DA is increased it is not a matter to enjoy. bcoz in the market the prices already hiked and definitely it will not bcome ur savings.
but our FM PC at any time wants it to cut or to be taken away by means ofTAX :(
Posted 28th October 2006 From India, Bangalore
DA is in today's time is primarily relevant to wages paid to the workers as someone rightly mentioned as we are a socialistic country and not to staff who today by n large comparatively better off.

Worker's DA is calculated on a monthly basis - which varies based on the index released by the Govt.

Posted 29th October 2006 From India, Pune
In India, Dearness allowance (D.A.) is part of a person's salary. D.A. is calculated as a percent of the basic salary. This amount is then added to the basic salary along with house rent allowance to get the total salary. Rates vary as per rural/urban areas etc.:)

Posted 1st December 2008 From India, Mumbai
Dear Ajmal Thanks for the information and the link Keep on posting Regards Sudharshanan
Posted 1st December 2008 From India, Madras
Pl’z tell me what the % of basic salary for DA and in which condition we gives it to employee.
Posted 29th January 2009 From India, New Delhi
Mr. Mirza, Would you tell me the full process about how to calculate VDA ? Regards, Purshottam Saini
Posted 1st April 2009 From India, Calcutta
Dear friends, Herewith i am attaching an excel file showing the DA calculations. Thanks & Regards, S.Pradeep.
Posted 27th November 2009
Attached Files
Shared By Cite.Community Member "pradeepselvaraj" For Public Download
File Type: xls Dearness Allowance.xls (30.5 KB, 1746 views)
Dear sir/Ma'm

If some one's salary is 5000 and we want to enroll him in Pf then how we will brake his salary so that we pay his Pf amount on his basic salary, how/where we adjust his remaining amount of salary.


Posted 23rd February 2010 From India, Moradabad
Dear all, I just want to know that, an employee on probetion period is elegible for EL & Bonus or not. As per factory act 1948. (salary Rs. 13000 pm) regards Atif
Posted 16th March 2010 From India, Moradabad
Considering the living cost and all, Wage Revision is being done once in five years or ten years. But inflation will go up day by day and subsequently the money value will come down. To compensate this we have to wait till the next Wage Revision, which is not practical. That is why the DA is introduced.

The devaluation of money can be assessed through Whole Sale Price Index, All India Cosumer Price Index etc. The difference between these two is that, price variation of all commodities are taken into account for Whole Sale Price Index. But the All India Consumer Price Index is based on a particular cosumer viz. Industial Worker and that even, on some specified commodiies & services called "Basket of goods".

Based on All India Consumer Price, Industrial DA being paid; variable in quarters commencing from January, April, July & October. I.e. for January the AICPI will be the average of previous September, October & November. Similarly for April it will be December, January & February, for July it will be March, April & May and for October it will be June, July & August respectively.

When the money devaluation is fully compensated it is called as full DA neutralisation. The formula for full DA neutralisation = (Total points - Base points)/ Base points (in percentage). The AICPI is introduced in India in 1960 and revised in 1982 & 2001. AICPI of 2001 x 4.63, we get AICPI of 1982 and AICPI of 1982 x 4.93, we get AICPI of 1960. For DA calculation AICPI of 1960 is accepted as the base.

Now in India mainly two term's wage settlements are in exist; Wage Settlements of 1.1.1997 & 1.1.2007. The base point in 1.1.1997 is 1708 & in 1.1.2007 is 2884.

I shall quote one example,i.e. calculation of AICPI for July '10. This is equalent to average of previous March, April & May; which recorded as 170, 170 & 172 (Base year 2001). Multiply with 4.63 and round, we get 787,787 & 796 (Base year 1982). Multiply with 4.93 and round, we get 3880,3880 & 3924 (Base year 1960). Find average of these 3 and round, we get 3895.

DA for 1.1.97 scale. Total points - 3895, Base points - 1708, Total - Base = 2187. % is 2187/1708 x 100 = 128.0 ( Correct to one decimal).

DA for 1.1.2007 scale. Total points - 3895, Base points - 2884, Total - Base = 1011. % is 1011/2884 x 100 = 35.1 ( Correct to one decimal).

I shall insert Excel sheet for IDA calculation w.e.f 1.10.2008. You may extent the rows further (as necessary) and just enter the 3 indexes towards the year 2001 in green colour columns. The results will appear in yellow and red is used for static informations.

With regards

ITI Employees' Association,
ITI Limited, PALAKKAD - 678 623,
+91 9447 467 667

AICPI (base 2001) can be had from the following site.
Labour Statistics Page 2
Posted 1st July 2010 From India, Bangalore
Attached Files
Shared By Cite.Community Member "abbasiti" For Public Download
File Type: xls DA update.xls (21.5 KB, 435 views)
Dear Prakash,

I have detailed the calculation of Industrial DA above. Also I have inserted the Excel sheet. Then why do you ask this question.

As per the All India Cosumer Price Index of June & July, the projected figure of IDA wef 1.10.2010 for Revised Scales (1.1.2007 scales) is 39.8% (enhancement of 4.7%) and for Pre revised Scales (1.1.1997 scales) is 136.1% ( enhancement of 8.1%).

Posted 1st September 2010 From India, Bangalore
Dear All,

Will anybody explain me, whether Dearness Allowance can be an Negotiable Element while forming and Workmen Agreement, If Wages Paid to workemen are more than Minimum Wages?

As an support please attach case law if any.

Shahu Bhonsle
Executive-Human Resources
Posted 2nd October 2010 From India, Mumbai

I am running a transporting company. I have morethan 800 workers. The Union leaders are claiming DA at a particular amount. But I am sure even they donot know what they are talking about. They never heared about the Simla index. For Motor Transport workers the DA has to pay @ Rs.2 per mensum for points above 1000 points. Now my problem is what is the present points. How to arrive at he Points.

Linking Factor and inflation rate, are they the same ?

Indices and Points, are they the same ?

Somebody has got to help me to solve the problem.

T T kuruvilla
Posted 15th August 2012 From India, Kottayam
thank you for the information...... its i have a doubt da is only given for govt. employess ha.....? then wt abt pvt...ppl...?
Posted 4th December 2012 From India, Hyderabad
Dear All who are in need of answer to this question.

I too came here to search the same thing...."the % of DA"

This is what I have will help you. and after surfing a lot I also have come to believe that DA is not fixed % of Basic pay. It can be calculated with the help of formula given below. You will need the Consumer Price Index (CPI) for calculating it. Search for it on the net.
And if can't find CPI and feel calculation is difficult, you can go ahead with 50% to 60% of Basic pay as DA. This information was also provided by one of our senior member. According to me it is ok to keep DA between 50 to 60 it is anyway not fixed.

Calculation of Dearness Allowance

Formula = [ {avg. AICPI for last 12 month - 115.76} *100 ] / 115.76

For 01/01/2007 D.A calculation

avg.AICPI in the year 2007 is = 118.95

D.A on 01/01/2007 = [{ 118.95 - 115.76}*100] / 115.76 = 2%

Hope that helps......
Posted 15th February 2013 From India, Pune


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