New Delhi, Aug. 23 -- Dearness allowance and dearness relief (DA and DR) is a percentage of the basic salary component for central government employees and pensioners. It is aimed at mitigating the impact of inflation and is adjusted bi-annually.

Announcements usually come in March and October, with rollouts in July the same year and January in the next year, respectively. Beneficiaries include more than 1 crore workers - about 50 lakh central government employees and around 65 lakh pensioners, including defence and railway personnel and retirees.

Notably, while lakhs of employees and pensioners receive DA, many are unsure of how it is credited, taxed, and reported on their income tax returns. Thus, today we explain if DA is subject to ...