When you compute your annual income then sometimes DA is added to it. But many individuals don’t know the DA Full Form. The Full Form of DA in Salary is Dearness Allowance. It is a component of a salary and the amount of DA is a certain percentage of salary. Dearness Allowance is related to the cost of living that an individual bears in a city. The amount of DA might vary from city to city depending on rural and urban areas. Therefore, in short, a Dearness Allowance is given to public sector employees by the government, against the cost of living they are handling. Even pensioners are entitled to receive dearness allowance from the government and it is added to their pension.
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Why is DA Different in Different Cities?
DAs are given according to the location of the employee. The amount or the percentage of DA will be different for the employee living in a rural area from the employee living in a metro city or urban area. If you live in a small town or village then the percentage of DA allowance will be less than the person living in a metro city.
The reason for the difference is the cost of living in an urban area is more than the cost of living in a rural area. You know that dearness allowance is calculated on the basis of the cost of living.
Types of DA
There are two types of DAs and they are IDA and VDA. You can see the full form of both of them below:-
IDA:- The full form of IDA is Industrial Dearness Allowance and it is given to the public sector workers working under the Central Government.
VDA:- The VDA Full Form is Variable Dearness Allowance and it is also given to the Central Government employees. But the DA is revised every 6 months as per the consumer price index.
Facts About Dearness Allowance
- The private sector employees in India don’t receive Dearness Allowance.
- DA of employees differs from one location to another irrespective of the organization in which they are working.
- In order to compensate for inflation, pensioners can claim under The Pension Rule 50A.
- DA is revised according to the cost of the living index after every 6 months.
- You will have to pay Tax on DA under the Income Tax Act 1961.
- In case of reemployment, you don’t have permission to draw dearness allowance.
- Indian Pensioners living outside India are also eligible for DA.
We have told you DA full form and all the facts about DA in salary. The full form of DA is Dearness Allowance in Salary. It is given against the cost of living and varies from location to location. The cost of living can’t be the same for all the locations therefore the DA also varies from one location to another. You must also see the types of DAs given to employees and find out under which DA you are in.