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Salary Increment Formula:
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The Salary Increment Calculator helps employees in India calculate their new salary after considering Dearness Allowance (DA) and House Rent Allowance (HRA) components. These are essential salary components in the Indian payroll system.
The calculator uses the salary increment formula:
Where:
Explanation: The formula calculates the total salary by adding DA and HRA percentages to the basic salary, providing the gross salary amount.
Details: In the Indian salary structure, DA compensates for inflation, while HRA helps with accommodation expenses. Understanding these components is crucial for financial planning and tax calculations.
Tips: Enter old salary in rupees, DA percentage, and HRA percentage. All values must be valid (salary > 0, percentages ≥ 0).
Q1: What is Dearness Allowance (DA)?
A: DA is a cost of living adjustment allowance paid to employees in India to mitigate the impact of inflation on their salaries.
Q2: How is HRA calculated for tax purposes?
A: HRA tax exemption is the minimum of: actual HRA received, 50% of basic salary (metro) or 40% (non-metro), or rent paid minus 10% of basic salary.
Q3: Are DA and HRA part of basic salary?
A: No, DA and HRA are separate components from basic salary. Basic salary forms the core component, while DA and HRA are allowances.
Q4: Do all employees get DA and HRA?
A: DA is primarily for government employees, while HRA is common across both government and private sector employees in India.
Q5: How often is DA revised?
A: For central government employees, DA is typically revised twice a year - in January and July, based on the Consumer Price Index.