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salary - Dearness allowance - illustration 4 and illustration 6
Direct Taxation
illustration 4 Da is 20% of basic salary and 60% forms part of salary In average salary computation the basic pay was 644000 and da was calculated as (644000*20% ) * 60% sir told 20% of basic salary is da out of which we are taking only 60% for avg salary calculations But in illustartion 6 where question says da is 120% of basic salary and 40% forms part of salary here for avg salary, da was calculated just as basic salary 97000* 40% only My question is why da is not calculated as 97000* 120% * 40% just like illustration 4
Answers (3)
In Illustration 6 - It was given in the question that 40% of the BASIC SALARY forms part of salary as per terms of employment. So, we have to take only 40% of basic salary. In illustration 4 - It was given in the question that 60% of DA also forms part of salary as per terms of employment. So, we will take 60 % of DA also while doing calculation.
Yoga Vishnu
In Illustration 6 - It was given in the question that 40% of the BASIC SALARY forms part of salary as per terms of employment. So, we have to take only 40% of basic salary. In illustration 4 - It was given in the question that 60% of DA also forms part of salary as per terms of employment. So, we will take 60 % of DA also while doing calculation.
so Da for the purposes of average salary will be calculated on either basic salary only or da only depending upon the question and in general da* is calulated on total da as a % of forming part of salary terms? only if question tells basic salary forms part of salary terms we have to calculate on basic salary and not on da? right?
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