Why Do Companies Often Skip Mentioning DA on Payslips Despite Government Rules?

I just want to know, when DA is compulsory from the government side, why do most companies not mention it on the payslip? And if some companies do, they often do not follow the figures provided by the government. Please guide me as soon as possible.

Regards,
Vikas.

Please share the information under which provisions the DA is compulsory, as mentioned by you.

Thanking you.

Regards,
Shailesh Parikh

[Phone Number Removed For Privacy Reasons]
Vadodara, Gujarat

Dearness Allowance in Government Organizations

DA is mostly present in all government organizations, both at the state and central levels. It is not compulsory for other establishments.

Regards,
Vikas.

DA is Dearness Allowance, usually given so that employees can cope with rising inflation.

While pursuing my MBA, my professor mentioned that, on average, DA is calculated as around 20% of Basic. However, the actual calculation of DA is much more complicated.

Every year (or semi-annually—I am unsure of the time frame), the government indicates the inflation rate, based on which DA is calculated.

The calculation is a little tricky, and since it wasn't taught to us but rather shared by chance, I happened to forget the formula mentioned in that lecture.

I believe the calculations can be obtained from some government institute, as they are the ones who follow to explicitly include DA in their salary component.

Regarding private firms, as I mentioned, the calculations change periodically, adding to the complexity.

When I asked a similar question to my academic experts, they mentioned:

"Most private firms do not include DA explicitly to avoid the hassle of periodic calculations. The Basic they mention is considered as Basic + DA. So, if inspectors inquire, they would explain that due to inflation, DA increased, but Basic decreased relatively, keeping Basic + DA unchanged."

I am uncertain about the validity of this explanation, but this was the answer shared during our Compensation class.

Senior advice is much needed.

Company Policies on Pay Packages

Every private or public limited company has the liberty to formulate its own policy regarding pay packages for its employees, as there is no enactment binding them to pay DA as a compulsion. It is a management decision, keeping in view manpower availability and its best HR policies.