7th Pay Commission: Big change happening on 1st July! Know how much your salary will increase after increase in DA?

New Delhi: The central government had made a big announcement of DA reinstatement for the 52 lakh employees of the country. After this announcement by the Central Government, the Central Government servants (CGS) are engaged in calculating how the matrix of 7th Pay Commission will be changed. According to the announcement of the Narendra Modi government, from 1 July 2021, DA benefit of Central Government employees is going to be restored. Finance Ministry Anurag Thakur had given information in this regard in the Rajya Sabha last month.

According to the All India Consumer Price Index (AICPI) data release, between January and June 2021, at least DA can be increased by 4 per cent.

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How much will your salary increaseAs the Center has announced to reduce all three pending DA installments from 1 July 2021. After the reinstatement of DA, the DA of central employees can increase from 17 per cent to 28 per cent. This includes a 3 percent increase in DA from January to June 2020, a 4 percent increase from July to December 2020, and a 4 percent increase from January to June 2021.

How is salary calculated?
According to the rules of the Seventh Pay Commission, the salary of a central government employee is divided into three parts – basic salary, allowances and deductions. Net CTC is a central government employee who is the 7th CPC fitment factor and the sum of basic pay multiplied by all allowances. However, net salary is the difference between net CTC and deductibles like PF contribution, gratuity, etc.

There will be a change in PF and gratuity
The potential DA hike will also affect the central government employee’s monthly PF, gratuity contribution. Explain that the contribution of CGF’s PF and gratuity is calculated on the basis of basic salary plus DA. DA is going to increase from 1 July 2021, the contribution of an employee’s monthly PF and gratuity will also be affected. This means accumulating more money in retirement-oriented funds like PF and gratuity.

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Retired central employees will get benefit
Explain that due to Corona virus epidemic, the government had banned the DA. Increasing DA will also increase DR in the same proportion. Dearness Relief (DR) of retired central government employees will also be restored due to increase in dearness allowance.

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