what is the difference between dearness allowance and dearness pay
janak
(post graduation)
(1327 Points)
Replied 01 August 2010
(1)Dearness allowance and dearness pay are one and the same in the sense of meaning. However in terms of monetary & computation there is a difference between them. For IT both are taxable.
(2)Dearness allowance as you know is paid to counter balance the pay with the rising prices i.e., inflation. It is a fixed % of Basic pay.
Dearness Pay is generally not a regular item of salary in case of Govt employees. It is inserted generally before a pay revision is expected instead of providing an interim relief to the employee................. A part of DA is merged with basic pay as Dearness Pay . For all purposes it shall be as good as basic pay like computation of allowances. Even DA is calculated on BP +DP amount.
Q.Here you can get a doubt, even i get, why is DP not termed as BP even if for all purposes it is treated as BP ?
The reason would be that for the raise in BP the govt has issued a commission [as DP is paid in anticipation of pay rise]. Only on recommendations and acceptance of such recommendations the parliament approves the rise in BP until then the govt cannot alter the BP.
Hope........ you would get it
regards:Janak
| Originally posted by : janak | ||
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(1)Dearness allowance and dearness pay are one and the same in the sense of meaning. However in terms of monetary & computation there is a difference between them. For IT both are taxable. (2)Dearness allowance as you know is paid to counter balance the pay with the rising prices i.e., inflation. It is a fixed % of Basic pay. Dearness Pay is generally not a regular item of salary in case of Govt employees. It is inserted generally before a pay revision is expected instead of providing an interim relief to the employee................. A part of DA is merged with basic pay as Dearness Pay . For all purposes it shall be as good as basic pay like computation of allowances. Even DA is calculated on BP +DP amount. Q.Here you can get a doubt, even i get, why is DP not termed as BP even if for all purposes it is treated as BP ? The reason would be that for the raise in BP the govt has issued a commission [as DP is paid in anticipation of pay rise]. Only on recommendations and acceptance of such recommendations the parliament approves the rise in BP until then the govt cannot alter the BP. Hope........ you would get it regards:Janak |
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