Ever since the government has announced that it will reinstate the Dearness Allowance (DA) restoration for around 52 lakh central government employees, the central government servants (CGS) are confused about how it is going to affect their salary.
The government has already announced that these benefits will be given to the employees from July 1, 2021. The central government employee's DA will be increased from 17 percent to 28 percent which includes a 3 percent, 4 percent, and expected 4 percent DA hike due from 1st January 2021.
According to the 7th pay commission rules, the employees’ basic salary will be multiplied by the fitment factor which is 2.57 and that will increase the monthly CTC of government employees except for allowance.
The other part of the salary breakup would be the allowances which include Dearness Allowance (DA), Travel Allowance (TA), House Rent Allowance (TA), medical reimbursement, etc.
The Travel Allowance (TA) will further increase after the DA with the pending arrears that will be added to the salary.
The DA hike will also change the monthly PF, Gratuity contribution of the central government employees.