Work out dearness allowance instantly with clear inputs, formula shown and shareable results.
Dearness allowance is a percentage of basic pay revised periodically in line with a consumer price index, and revisions are usually notified after the effective date, which generates arrears. Because DA also drives HRA, transport allowance and pension, a DA rise compounds through the whole pay packet.
Dearness allowance
DA = Basic pay x DA rate %
Arrears
Arrears = (New DA - Old DA) x Months of arrears
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
Typically twice a year, keyed to a moving average of the applicable consumer price index for industrial workers.
Yes, DA is fully taxable as salary. It is also treated as pay for computing certain retirement benefits.