Latest 7th Pay Commission update on DA, HRA, TA allowances: Now, Central government employees are anticipating an alteration in their salaries would be happening after the implementation of the New Wage Act 2021.
Latest 7th Pay Commission update on DA, HRA, TA allowances: Now, Central government employees are anticipating an alteration in their salaries would be happening after the implementation of the New Wage Act 2021. The salaries of central government employees will undergo certain changes if the New Wage Code is implemented, although impact will not be big. From April 1, the central government is planning to introduce the New Wage Code. The basic minimum salary of an employee will correspond to at least 50 per cent of the net CTC, following the implementation of this New Wage Act 2021.
With the implementation of the New Wage Code, an individual’s allowance can’t go beyond 50 per cent of net CTC, altering one’s allowances like Dearness Allowance (DA), Travel Allowance (TA) and House Rent Allowance (HRA) as a consequence.
In a conversation with Zee Business, Jitendra Solanki, SEBI registered tax and investment expert said that following the implementation of the New Wage Code, the allowances will be capped at 50 per cent of the net monthly CTC. This suggests that DA, TA, HRA which fall under allowances will be impacted as an individual’s monthly allowance is capped at 50 per cent of his/her net CTC.
Now, there is much anticipations on whether the New Wage Code will also alter the Gratuity and Provident Fund (PF). Speaking on this, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants informed that PF and Gratuity is calculated on monthly basic plus DA and hence, following the implementation of the New Wage Code, the PF and Gratuity will also get impacted.
