seventh pay fee pay matrix: DA restoration to spice up PF, gratuity of CGS
seventh pay fee pay matrix: The Dearness Allowance (DA) restoration of the central authorities staff goes to happen from 1st July. The heart has already made an announcement on this regard because the Minister of State (MoS) on the Ministry of Finance has already made an announcement on this regard within the Rajya Sabha in March 2021. However, for additional info to the central authorities staff, DA restoration won’t simply result in rise of their month-to-month seventh CPC wage however it will result in increase for his or her Provident Fund (PF) and gratuity as properly. According to tax and funding consultants and central authorities staff consultant, DA restoration will certainly push Central Government Servants’ (CGS’) month-to-month wage as their DA will leap from present 17 per cent to no less than 28 per cent, however within the long-term, it’ll have constructive affect on central authorities staff’ retirement corpus like PF and gratuity as properly.
seventh CPC DA hike to push PF stability
Speaking on the advantages of DA restoration from 1st July 2021 Kartik Jhaveri, Director — Wealth Management at Transcend consultants stated, “A central government servant’s PF contribution is calculated on the basis of one’s basic salary plus DA. As the DA will go up from existing 17 per cent to around 28 per cent, there will be rise in employee and employers contribution in monthly PF contribution. This will lead to rise in PF balance in the long-term.”
Standing in sync with Kartik Jhaveri’s views, SEBI registered tax and funding knowledgeable Jitendra Solanki stated {that a} central authorities worker’s gratuity contribution is calculated on the idea of fundamental wage plus DA. As DA goes to rise from 1st July 2021, a central authorities worker’s gratuity contribution will certainly go up resulting in larger retirement corpus within the long-term time horizon.
Calculation for DA hike
On how DA will rise from present 17 per cent to twenty-eight per cent Shiva Gopal Mishra, Secretary — Staff Side at National Council of JCM stated, “DA for central government employees have been freezed from 1st January 2020 to 30th June 2021. That means, 3 per cent DA hike announced for 1st January 2020 to 30 June 2020, 4 per cent DA hike announced for 1st July 2020 to 31st December 2020 will get added in the existing DA of 17 per cent. Now, DA hike for 1st January 2021 to 30th June 2021 is also awaited. As per the 7th Pay Commission DA hike rules, average inflation for July to December 2020 period is around 3.5 per cent that means the minimum DA hike that the center would announce will be 4 per cent (nearest higher round figure of the average inflation).” So, the web rise in DA anticipated from 1st July 2021 is no less than 11 per cent (3 + 4 + 4). Mishra of JCM additionally stated that this rise in DA from 1st July 2021 will result in rise in central authorities staff’ PF and gratuity stability in long-term perspective.
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