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DA Arrears Summary
Gross DA arrears
⚠️ File Form 10E on the income-tax portal before your ITR to claim relief u/s 89(1) and avoid excess tax on arrears.
Check your full tax for FY 2025-26
DA arrears are added to your salary income. Use the free ITR calculator to see total tax, 87A rebate and whether the New or Old regime saves you more.
Open the ITR Calculator → Section 87A Rebate CalculatorWhat is Dearness Allowance (DA)?
Dearness Allowance (DA) is a cost-of-living supplement paid to central and state government employees and pensioners to offset the impact of inflation. It is expressed as a percentage of basic pay and is revised periodically by the government based on movements in the All India Consumer Price Index for Industrial Workers (AICPI-IW).
How DA is revised
For central government employees, DA is revised twice a year:
- 1 January revision — usually announced in February or March of the same year.
- 1 July revision — usually announced in September or October.
Because the announcement comes months after the effective date, the extra DA is paid as arrears for the intervening months. For example, if January DA goes from 53% to 55% and is announced in March, employees receive 2 months of arrears (January and February) along with March's salary.
How DA arrears are calculated
DA arrears = Basic Pay × (New DA% − Old DA%) ÷ 100 × Number of months
For example: Basic = ₹50,000, Old DA = 53%, New DA = 55%, Arrear period = 6 months.
Increase = ₹50,000 × 2% = ₹1,000/month. Arrears = ₹1,000 × 6 = ₹6,000.
Note that other allowances linked to DA (such as Transport Allowance, HRA or city compensatory allowance) may also change with a DA revision — this calculator shows only the DA component.
Are DA arrears taxable?
Yes — DA is fully taxable as salary income, and DA arrears are taxable in the year they are received. The lump sum receipt in one year can push you into a higher slab than you would otherwise be in. That is why the government provides Section 89(1) relief — it re-spreads the arrears over the years to which they relate for tax computation, so you pay only the tax you would have paid had the arrears been received on time.
Section 89(1) relief and Form 10E
To claim Section 89(1) relief you must file Form 10E on the income-tax e-filing portal before you submit your ITR. If you forget to file Form 10E, the relief will not be granted and you may receive a demand notice for the excess tax. The ITR portal guides you through the Form 10E calculation, which compares tax with and without arrears for each relevant year.
Frequently asked questions
What is Dearness Allowance (DA)?
DA is a cost-of-living supplement paid to government employees and pensioners as a percentage of basic pay, revised twice a year based on the AICPI-IW inflation index.
How often is DA revised?
DA for central government employees is revised twice a year — effective 1 January and 1 July — though the announcement and payment come later, creating arrears.
Are DA arrears taxable?
Yes, DA arrears are fully taxable as salary income. However, you can claim Section 89(1) relief by filing Form 10E on the income-tax portal before your ITR, so arrears are taxed at the rate for the years they were earned.
What is Form 10E and why is it important?
Form 10E is a declaration filed on the income-tax e-filing portal to claim relief u/s 89(1). It calculates the tax you would have paid had arrears been received on time and ensures you aren't taxed at a higher rate for lump-sum receipt. File it before your ITR to avoid a demand notice.
Is my data stored or sent anywhere?
No. All calculations run entirely in your browser — nothing you type is transmitted to or stored on any server.