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%