Dearness Allowance

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VIJAY (Querist)
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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)
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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)
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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)
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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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