Hello Vikas,
DA is Dearness Allowance.
This is usually given so that the employees can live with the rising inflation.
While I was pursuing my MBA, my professor told me that on an average we calculate DA as around 20% of Basic.
However the actual calculation of DA is much complicated.
Every year (or semi annually - I am unaware of time frame) the government indicates the inflation rate according to which DA is to be formulated and calculated.
The calculation was a little tricky and since it was not taught to us, just shared by chance, I happen to forget the formula that was mentioned in that lecture.
I believe the calculations can be obtained from some government institute as they are the ones who follow to include DA in their salary component explicitly.
As far as private firms are concerned, as I said the calculation keeps on chaging periodically and it adds to the headache.
When I had asked similar question to my academic experts, they said the foll:
"Most private firms do not include DA explicitly to avoid the hassels of calculations periodically. The Basic that they mention is considered as Basic + DA. So if the Inspector asks they would say because of inflation DA is increased but basic went down relatively so that your Basic + DA do not change."
I am unsure how good or bad or approved this reason is, but this was the answer shared to us during our class on Compensation.
Senior's advice is very much needed.