Govt increases Dearness Allowance to 50% for January 2024; Changes calculation method

The Central Government has raised the Dearness Allowance or DA to 50% for January 2024 for central govt employees. However, there is a change in the calculation method.

The DA to be received from July 2024 will now be calculated from zero, based on the All India Consumer Price Index numbers between January and June. The January AICPI numbers, released in February, indicate a 1% increase in dearness allowance.

Additionally, Dearness Relief (DR) for central government pensioners has been increased by 4% to 50%. The revised DA is effective from January 1, 2024.

DA calculation method

The calculation method for Dearness Allowance (DA) of Central government employees is set to undergo a shift in 2024. As of January 1, employees are receiving a 50% DA.

According to the rule, once the DA reaches 50%, it will be merged with the basic salary, and the calculation will reset from zero. However, there is currently no clarity provided by the Labor Bureau regarding this process.

Consequently, the calculation of dearness allowance is expected to continue beyond the 50% mark for the time being.