Dearness Allowance

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VIJAY (Querist)

29 March 2009 Hi experts,

Can anybody tell me that, What is "Dearness Allowance" and It's applicability..?

Thanks!
Vijay

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

29 March 2009 It is an extra amount given to an employee to meet the burden of inflation or increased cost of living.
Treatment: Fully taxable in all cases.

Note: Sometimes , it is given that DA/DP is not forming a part of retirement benefit (Leave encashment, Pension, Provident Fund, etc.). In such case, DA/DP itself shall be fully taxable. However, for calculating taxable Leave encashment, Pension, HRA, etc., DA/DP will be included in ‘salary’ only if it forms a part of retirement benefit

VIJAY

VIJAY (Querist)

29 March 2009 Thanks sir,

Also tell me, What is it's efect on EPF calculation..?

Thanks!
vijay

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

30 March 2009 under IT act for employer contribution to recognised providend fund exemption is provided up to 12% of salary
such salary mean:
basic+ DA(forming a part of retirement benefit ) and commssion (as fixed % on turnover)

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