Central employees and pensioners will get 18 months DA Arrear, payment in three installments – StudyToper

DA Arrear Latest Update 2025: The central government has given a big gift to its employees and pensioners. The government has announced that 18 months of DA Arrear (Dearness Allowance Arrears) will be given to central employees and pensioners. This decision has brought great relief to lakhs of central employees and pensioners.

Under this decision, central employees and pensioners will get 18 months of DA arrears from January 2020 to June 2021. This outstanding amount will be paid in three installments, which will help employees manage their financial affairs better.

What is DA Arrear?

DA Arrear or Dearness Allowance Arrear is the amount that is payable to the employees for the previous period when their salary was not increased by Dearness Allowance. This amount is given to reduce the effect of inflation and maintain the purchasing power of the employees.

Key Features of DA Arrear:

Importance of DA Arrear

Payment of DA Arrear is important for central employees and pensioners in several ways:

1. Financial Assistance: This amount will provide additional financial assistance to the employees, so that they can manage their expenses better.
2. Relief from inflation: Amid rising inflation, this amount will provide relief to the employees and help in maintaining their purchasing power.
3. Boosting morale: This step by the government will help in boosting the morale of the employees and boost their work motivation.
4. Boost to the economy: The distribution of this huge amount is expected to boost the country’s economy as it will increase demand in the market.

How is DA Arrear calculated?

Calculating DA Arrear is a complex process, involving many factors. Primarily, this calculation is done in the following manner:

1. Basic Pay: The basic pay of the employee is the basis of calculation.
2. DA Percentage: The DA percentage declared by the government is taken into consideration.
3. Time Period: The period for which DA Arrear is payable is included in the calculation.
4. Formula: Basic Pay x DA Percentage x Time Period (in months)

For example, if the basic salary of an employee is ₹50,000 and DA has increased from 5% to 7%, then the DA Arrear for 18 months will be calculated as follows:

Basic lesson

DA Arrear = ₹50,000 x 2% x 18 months

= ₹18,000

Impact of DA Arrear Payment

This massive payment of DA Arrears is expected to have a cascading impact:

1. Impact on Employees:
   • improvement in economic situation
   • Increase in savings and investment
   • improvement in standard of living
3. Impact on Economy:
   • Increase in economic activities due to increase in demand in the market
   • growth in retail
   • Potential increase in GDP
5. Financial burden on government:
   • Additional expenditure of approximately ₹34,000 crore
   • pressure on fiscal deficit

DA Arrear Payment Process

DA Arrear will be paid in three installments. The process will be as follows:

1. First installment: To be paid in March 2025. This will include 40% of the total DA Arrear.
2. Second installment: To be paid in June 2025. This will include 30% of the total DA Arrear.
3. Third installment: To be paid in September 2025. This will include the remaining 30% amount.

This installment-wise payment will help the government manage the financial burden and will also give employees an opportunity to plan their finances better.

Eligibility for DA Arrear

The following categories of people are eligible to receive DA Arrear:

1. Central Government Employees: All regular Central Government employees who were in service between January 2020 to June 2021.
2. Central Pensioners: All Central Government pensioners who were receiving pension in the said period.
3. Employees of Autonomous Institutions: Employees of autonomous institutions working under the Central Government are also eligible for this.
4. Members of the Armed Forces: Members of the Army, Navy and Air Force are also eligible for this DA Arrear.

Distribution and Payment of DA Arrear

The distribution and payment of DA Arrear will be done through a systematic process:

1. Direct Bank Transfer: The amount will be deposited directly into the bank accounts of employees and pensioners.
2. Departmental Process: Every government department will make arrangements for calculation and distribution of DA Arrear to its employees.
3. Online Portal: Employees will be able to check their DA Arrear status through a special online portal.
4. Grievance Redressal: In case of any discrepancy or issue, a dedicated helpline and grievance redressal mechanism will be set up.

Use of DA Arrear: Tips and Precautions

DA Arrear can be a huge amount, and its correct use is important. Some tips and precautions:

1. Make a budget: Make a detailed budget of the amount received.
2. Pay off debt: If there is any high-interest debt, consider paying it off.
3. Emergency Fund: Keep some amount aside as an emergency fund.
4. Invest: Invest some amount for long-term financial goals.
5. Avoid unnecessary expenses: Avoid unnecessary expenses after receiving a large amount of money.
6. Tax Planning: Get information about taxes applicable on DA Arrear and plan accordingly.

DA Arrear: Frequently Asked Questions (FAQs)

1. Will income tax be levied on DA Arrear?
   Yes, DA Arrear comes under the purview of Income Tax and will be taxed as per rules.
2. Are part-time employees eligible for DA Arrear?
   No, only regular full-time employees are eligible.
3. Will retired employees also get DA Arrear?
   Yes, employees who were in service between January 2020 to June 2021 and have now retired are also eligible for DA Arrear.
4. Will the DA Arrear amount be received in lump sum?
   No, DA Arrear will be paid in three installments.
5. Will interest be paid on DA Arrear amount?
   No, no interest will be paid on the DA Arrear amount.

Disclaimer:

This article is for informational purposes only. Although efforts have been made to keep this information accurate, government policies and decisions are subject to change. Please refer to the official websites or announcements of the respective government departments for updates and official information. The author or publisher will not be responsible for any decisions or actions taken based on the information provided in this article.