friends
is there any defferance between dearnes allowance & dearness pay ?
thanks in advance friends.
Poornima Y
(CA)
(94 Points)
Replied 16 August 2011
Sometimes if the DA rate is very high, a part of the DA will be merged with Basic pay and will be called as Dearness pay. This will be considered for all purposes as Basic but will be named as Dearness pay. Say, if the DA rate is 70% and it is decided to merge 50% of the DA with Basic. If the Basic of an employee is say, Rs.10000. The DA will be 7000 and the gross will be Rs.17000 (assumung there are no other allowances for simple understanding) before such merger. After the merger of 50% DA with Basic, The emoluments will be Basic-10000, Dearness Pay -5000, DA- 3000 (20% of 15000), gross -Rs.18000.
CAclubindia
