clarification whether DA to be taken for hra calculation

[Jessie Suhasini]

Dear Sir,

please clarify whether DA is to be taken into account togetherwith Bandpay and grade pay or not. Some personnel of our organisation( a central government) submitting income tax guidelines and miniready reckoner saying that salary includes DA if the terms of employment so provide(ef. where it is taken into account while calculating P.F.& allowance etc) but excludes all other allowances and perquisites.

and also quoting from Bahri's Handbook, 2009 that Salary for this purpose is Pay plus DA where DA is taken into account for pensionary benefits, CPF etc.,

Sir, pensionary benefits means, EL encashment, Gratuity etc and also for CPF contribution we are taking (BP+GP+DA)*10% and why should we not take for HRA calculation also. Please clarify

thanking you sir

suhasini

[DR.MARIAPPAN GOVINDARAJAN]

For the purpose of HRA including of DA with basic pay is at the discretion of the management. In Government sectors the basic pay is taken for HRA purposes. In some labor acts the definition of 'pay' covers DA etc.,

AI Summary

Dearness Allowance inclusion in salary for HRA depends on employment terms and employer discretion. Whether Dearness Allowance (DA) is included in salary for HRA depends on employment terms and employer practice; government practice often uses basic pay only for HRA, while DA is commonly included for pensionary benefits and provident fund calculations where terms so provide.