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

AI Summary

Should Dearness Allowance be included in House Rent Allowance calculations? Management discretion and income tax guidelines discussed. A query was raised regarding whether Dearness Allowance (DA) should be included in the calculation of House Rent Allowance (HRA). The inquiry referenced income tax guidelines and a handbook stating that DA is included in salary calculations for pensionary benefits and provident fund contributions. The response clarified that including DA in HRA calculations is at the management's discretion, noting that in government sectors, HRA is typically based on basic pay alone, although some labor acts include DA in the definition of 'pay'.