Dearness allowance

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Dearness Allowance (DA) is a cost-of-living adjustment, an increase made to the basic pay of government officials and public sector workers’ employees. Public sector companies employees are also counted as public sector workers, but not civil servants. Some private sector employees, specially in large legacy companies also receive dearness allowance. Dearness Allowance is calculated as a percentage of an Indian citizen's basic salary to mitigate the impact of inflation on people. Indian citizens may receive a basic salary or pension that is then supplemented by a housing or a dearness allowance, or both. The guidelines that govern the Dearness Allowance vary according to where one lives. Dearness Allowance is a fully taxable allowance. The two types of Dearness Allowance are: Dearness Allowance given under terms of employment. Dearness Allowance not given under the terms of employment.

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