How to calculate Dearness Allowance

How to calculate Dearness Allowance

Calculation of DA Rates

DA rates for Government employees are to be announced half yearly which will be applicable from first January and First July.

On implementation of Sixth Pay Commission recommendations with effect from 01.01.2006 a new method of calculation of DA (dearness allowance) rates is adopted by Central and State Governments.

DA rates are fixed on the basis of All India Consumer Price Index (AICPI) for industrial workers with Base year as 2001.

Method of Calculation

DA is calculated using the following formula

Dearness Allowance = (Avg of AICPIN for the past 12 months – 115.76)*100/115.76

(Fractions are ignored)

Example:To calculate Jan 2015 DA rate Price index average from Jan 2014 to Dec 2014 is taken.

Jan-14	237	101.71
Feb-14	238	102.79
Mar-14	239	103.87
Apr-14	242	105.02
May-14	244	106.17
Jun-14	246	107.25
Jul-14	252	108.48
Aug-14	253	109.63
Sep-14	253	110.71
Oct-14	253	111.57
Nov-14	253	112.29
Dec-14	253	113.3
Jan-15	254	114.52
Feb-15	253	115.6
Mar-15	254	116.68
Apr-15	256	117.69
May-15	258	118.7
Jun-15	261	119.78
Jul-15	263	120.57
Aug-15	264	121.36
Average		246.92

(November and December indexes are not actual s, based only on average for calculation purposes)

Dearness Allowance=(01.01.2014)=( 246.92-115.76)*100/115.76=113.29

DA (after ignoring fraction)=113%

So  DA Rate is 113%