INCOME TAX30 Sept 2026
DA news: Is dearness allowance part of your annual CTC? Taxation process, explained | Mint
Dearness Allowance (DA) for central government staff now stands at 60% of basic pay, after April's 2% hike, effective 1 January 2026. It affects about 50 lakh employees and 65 lakh pensioners, whose Dearness Relief moves with it. DA is part of your CTC, fully taxable, and must be shown separately in your income tax return. Another hike is expected around Diwali.
Key Statutory Highlights
- DA is part of an employee's cost-to-company and is credited to the monthly salary of central government employees.
- DA is subject to income tax in its entirety as per your tax slab, and the Income-Tax Rules require the DA component to be stated separately in your ITR.
- Dearness Relief applies to pension payouts while DA applies to employees' salaries, and unlike HRA, DA and DR are not exempt from income tax.
Actionable Advice for Taxpayers / Founders:Check your salary slip and Form 16 to confirm the DA amount, or your Dearness Relief if you are a pensioner, and make sure it is reported separately when you file your return. If anything looks unclear, check with your payroll team or a tax professional.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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