7th Pay Commission latest news today: Central government employees salary, PF, gratuity to change from this date; pensioners to get benefit too

7th Pay Commission latest news today: Here is a good news for around 52 lakh central government employees and nearly 60 lakh pensioners. The Dearness Allowance (DA) for the central government servants (CGS) and Dearness Relief (DR) benefit for the pensioners is expected to get restored by July 2021 as the centre froze DA, DR benefit till June 2021. If the centre doesn't delay the DA and DR restoration further, then there will be a huge jump in central government employees' monthly salary as their DA will become 28 per cent from the existing 17 per cent of their basic salary (this includes an expected 4 per cent DA hike expected from January to June 2021). Once the DA gets restored, the monthly PF and gratuity contribution will also jump exponentially as one's PF and gratuity is calculated on the basis of basic salary plus DA.

7th CPC: PF, gratuity calculation

Speaking on how a central government employees' monthly PF and gratuity will change after DA restoration; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "A central government employees' monthly Provident Fund (PF) contribution and gratuity is decided on the basis of one's basic salary plus DA. Since, DA will increase, one's PF and gratuity calculation is bound to go up as per the rise in DA." Jhaveri said that PF contribution rules allow up to 12 per cent of oen's DA plus basic salary. So, if a central government employees' DA goes up from existing 17 per cent to 28 per cent, their PF and gratuity contribution will also rise in the same manner.

Seventh Pay Commission: Travel Allowance (TA)

On how a central government employees' Travel Allowance (TA) will get changed after the DA hike, SEBI registered tax and investment expert Jitendra Solanki said that a central government servant's TA will rise in sync with the DA hike. So, DA hike will help rise in TA of a central government employee as well.

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7th Pay Commission: DR benefit for pensioners

Since, a central government pensioner's DR benefit is directly linked with the DA hike of a central government employee. The expected DA hike in July 2021 is expected to push pensioners monthly pension in the same manner.