DA and DP

Dear Allowance is an allowance granted to the employees to compensate for the cost of inflation. The Dearness Allowance will not
carry any add on benefit.
However, when certain portion of the Dear Allowance is converted into Dearness Pay, then the applicable allowance would get
calculated on (Basic Pay + Dearness Pay).
For instance normally Dearness Allowance is calculated as a % of Basic Pay.
In cases where there is Dearness Pay, then the Dearness Allowance would get calculated on (Basic Pay + Dearness Pay). To that
extent the employee would get increased amount in absolute terms.
Such DP is also taken into account at the time of arriving at the pension benefits etc.