Full form of IDA in Salary, Calculation, Changes, Types

Calculation of Dearness Allowance

• For the employees of the central government %, the IDA is calculated in = {(average of the all-India consumer price index (base year -2001=100) for last 12 months – 115.76)/115.76) *100}.
• For central public sector employees % IDAis {(average of the all-India price index (base year -2001=100) for the last three months -126.33)/126.3* 100}

 Use of Industrial Dearness Allowance Under Income Tax

• Suppose a salaried employee gets a rent-free accommodation from their work where all the previous conditions are met. Then IDA becomes a part of the salary, where it becomes a retirement benefit salary.
• The income tax in India wants the industrial dearness allowance to be mentioned separately in the returns that have been filled. IDA is fully taxable for salaried employees. 

Changes in Industrial Dearness Allowance in Budget 2018

Industrial Dearness Allowance for the Pensioners

What is an Industrial Dearness Allowance?

Types of Dearness Allowance

• Industrial dearness allowance – This allowance is given to the public sector employees of the central government. The industrial dearness allowance goes through certain changes quarterly to cope with the increasing market changes.
• Variable dearness allowance – This allowance goes to the central government employees. It is revised every six months to fight the offset of inflation according to the consumer price index.