# How to calculate DA

Posted on 20th Jul 2018 | 1102 views

5 avg. rating (100% score) - 1 votes

## HRA calculation:

HRA calculation is a part of DA or dearness allowance is calculated as a specific percentage of the basic salary which is then added to the basic salary along with other components like HRA (House Rent Allowance) to make up the total salary of an employee. There is no single procedure to arrive at Salary Breakup and there are different methods followed by different organizations. HRA or House Rent Allowance is the salary component given by a company to an employee in order to meet expenses related to the renting of accommodation which the employee takes for residential purposes. HRA is applicable to both employees from the private sector as well as the public sector whereas DA is majorly applicable to employees working in the public sector.

## HRA calculation online:

HRA calculation online is an employee can request House Rent Allowance (HRA) to meet your rented accommodation-related expenses. Employee’s who live in a rented house can request this exemption for taxes.HRA can be fully or partially exempt from tax. If an employee does not live in a rented accommodation but still get house rent allowance, the allowance will be fully taxable.

HRA calculation in INDIA

Dearness Allowance is awarded to the employee against the price rise to mitigate the impact of inflation .Rules are that Employee cannot claim for the full rental amount he’s paying. The exemption is based on the least of the actual amount allotted by the employer as the HRA and Actual rent paid less 10% of the basic salary.

DA calculation in salary

Dearness Allowance as per 7th CPC Basic Pay= (Avg of CPI-IW for the past 12 months – Average of CPI-IW recorded in 2015)*100/(Average of CPI-IW recorded in 2015)

7th pay commission, new formula to calculate dearness allowance.

= ((12 Months Average of AICPIN)-261.4)*100/261.4)

HRA formula

The HRA should not be more than 50% of salary following with an example

If an employee

Basic Salary – Rs. (5000*12) – Rs. 60,000/-

Dearness Allowance (D.A) – Rs. (1000*12) – Rs. 12000/-

House Rent Allowance (H.R.A.) – Rs. (2000*12) – Rs. 24000/-

Actual Rent Paid – Rs. (2000*12) – Rs. 24000/-

Minimum amount to exempt from taxes

Actual HRA received (2000*12) – Rs. 24000/-

Rent amounted in extra of 10% of salary (24000-7200) – Rs. 16800

40% of Salary – Rs. 28800/-

Rs. 16800 should be excluded and the balance Rs. 7200 to be combined in the wage

## 0 Comments on How to calculate DA

Comment as a guest:

### POPULAR POSTS

 What is Appointment letter Format? 26th Jun 2018 Top 10 facts why you need a cover letter? 08th Jun 2018 Are you looking for a job in Event Management? 28th May 2018 Pharmaceutical job opportunities on rise in Gulf 23rd May 2018 MNC Vs Startup: Are you Confused to Choose between? 09th Aug 2017 Perspectives of Unemployment in India 01st Jul 2013

View All

How consistently does your organization reward you for good work?

Very difficult

Reasonably consistently

Not at all consistently

View All

View All

View All
• 2018
• January
• March
• April
• 2017
• January
• February
• March
• April
• May
• July
• 2016
• February
• March
• April
• May
• June
• July
• August
• September
• November
• December