what is the difference between dearness allowance and dearness pay
3 Replies
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
(Guest)
| 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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