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<p><strong>Repo rate vs Loan EMI:</strong> In the February, April and June monetary policy committee (MPC) meetings this year, borrowers got huge relief from the Reserve Bank of India (RBI) as the central bank gave a cumulative rate cut of 100 bps. The significant rate cut translated into cheaper loans as equated monthly instalments (EMIs) of repo rate-linked loans also got slashed.</p>

<p>In contrast, in Wednesday's MPC meeting, RBI governor Sanjay Malhotra paused rate cuts, maintaining the repo rate of 5.5 per cent.</p>

<p>He said that the ongoing tariff tensions with the US are the cause behind the pause.</p>

<p>It means there will be no change in EMIs of repo rate-linked loans.</p>

<p>But there is still a high possibility of future rate cuts with 3 MPC meetings to go for this financial year.</p>

<p>The next meeting is scheduled for September 29-October 1.</p>

<p>The subsequent meetings will be held in December this year and February next year.</p>

<p>If the RBI cuts the repo rate by up to 50 bps and those are reflected in bank loans, find out in this write-up how much you may save on your home, auto and personal loans.</p>

<h2><strong>Condition 1: If MPC cuts rates by 0.25%</strong></h2>

<h2><strong>Home loan EMI</strong></h2>

<p>We are taking the example of a 20-year home loan at a 7.5 per cent interest rate</p>

<table border="1" cellpadding="1" cellspacing="1" style="width:500px;">
	<tbody>
		<tr>
			<td><strong>Loan amount</strong></td>
			<td><strong>&nbsp;EMI before</strong></td>
			<td><strong>EMI after</strong></td>
			<td><strong>&nbsp;savings/year</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 20 lakh</strong></td>
			<td><strong>Rs 16,112</strong></td>
			<td><strong>Rs 15,808</strong></td>
			<td><strong>Rs 3,648</strong></td>
		</tr>
		<tr>
			<td><strong>30 lakh</strong></td>
			<td><strong>Rs 24,168</strong></td>
			<td><strong>Rs 23,711&nbsp;</strong></td>
			<td><strong>Rs 5,484</strong></td>
		</tr>
		<tr>
			<td><strong>Rs&nbsp;50 lakh&nbsp;</strong></td>
			<td><strong>Rs 40,280&nbsp;</strong></td>
			<td><strong>Rs 39,519</strong></td>
			<td><strong>Rs 9,132</strong></td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Auto loan EMI</strong></h2>

<p>We are taking the example of a 5-year auto loan at a 9 per cent interest rate.</p>

<table border="1" cellpadding="1" cellspacing="1" style="width:500px;">
	<tbody>
		<tr>
			<td><strong>Loan amount</strong></td>
			<td><strong>EMI before</strong></td>
			<td><strong>EMI after</strong></td>
			<td><strong>Savings/year</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 3 lakh</strong></td>
			<td><strong>Rs 6,228</strong></td>
			<td><strong>Rs 6,191</strong></td>
			<td><strong>Rs 444</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 5 lakh</strong></td>
			<td><strong>Rs 10,379&nbsp;</strong></td>
			<td><strong>Rs 10,319&nbsp;</strong></td>
			<td><strong>Rs 720</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 10 lakh</strong></td>
			<td><strong>Rs 20,758</strong></td>
			<td><strong>Rs 20,637</strong></td>
			<td><strong>Rs 1,452</strong></td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Personal loan EMI</strong></h2>

<p>We are taking the example of a 1-year personal loan at a 10.10 per cent interest rate.</p>

<table border="1" cellpadding="1" cellspacing="1" style="width:500px;">
	<tbody>
		<tr>
			<td><strong>Loan amount</strong></td>
			<td><strong>EMI before</strong></td>
			<td><strong>EMI after</strong></td>
			<td><strong>Savings/year</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 2 lakh</strong></td>
			<td><strong>Rs 17,592</strong></td>
			<td><strong>Rs 17,569</strong></td>
			<td><strong>Rs 276</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 3 lakh</strong></td>
			<td><strong>Rs 26,389</strong></td>
			<td><strong>Rs 26,354</strong></td>
			<td><strong>Rs 420</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 5 lakh</strong></td>
			<td><strong>Rs 43,981</strong></td>
			<td><strong>Rs 43,923</strong></td>
			<td><strong>Rs 696</strong></td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Condition 2: If MPC cuts rates by 0.50%</strong></h2>

<h2><strong>Home loan EMI</strong></h2>

<p>We are taking the example of a 20-year home loan at a 7.5 per cent interest rate.</p>

<table border="1" cellpadding="1" cellspacing="1" style="width:500px;">
	<tbody>
		<tr>
			<td><strong>Loan amount</strong></td>
			<td><strong>EMI before</strong></td>
			<td><strong>EMI after</strong></td>
			<td><strong>Savings/year</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 20 lakh</strong></td>
			<td><strong>Rs 16,112&nbsp;</strong></td>
			<td><strong>Rs 15,506&nbsp;</strong></td>
			<td><strong>Rs 7,272</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 30 lakh</strong></td>
			<td><strong>Rs 24,168</strong></td>
			<td><strong>Rs 23,259&nbsp;</strong></td>
			<td><strong>Rs 10,908</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 50 lakh</strong></td>
			<td><strong>&nbsp;Rs 40,280&nbsp;</strong></td>
			<td><strong>Rs 38,765&nbsp;</strong></td>
			<td><strong>Rs 18,180</strong></td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Auto loan EMI</strong></h2>

<p>We are taking the example of a 5-year auto loan at a 9 per cent interest rate.</p>

<table border="1" cellpadding="1" cellspacing="1" style="width:500px;">
	<tbody>
		<tr>
			<td><strong>Loan amount</strong></td>
			<td><strong>EMI before</strong></td>
			<td><strong>EMI after&nbsp;</strong></td>
			<td><strong>Savings/year</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 3 lakh</strong></td>
			<td><strong>Rs 6,228</strong></td>
			<td><strong>Rs 6,155</strong></td>
			<td><strong>Rs 876</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 5 lakh</strong></td>
			<td><strong>Rs 10,379</strong></td>
			<td><strong>Rs 10,258</strong></td>
			<td><strong>Rs 1,452</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 10 lakh</strong></td>
			<td><strong>Rs 20,758</strong></td>
			<td><strong>Rs 20,517</strong></td>
			<td><strong>Rs 2,892</strong></td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Personal loan EMI</strong></h2>

<p>We are taking the example of a 1-year personal loan at a 10.10 per cent interest rate.</p>

<table border="1" cellpadding="1" cellspacing="1" style="width:500px;">
	<tbody>
		<tr>
			<td><strong>Loan amount</strong></td>
			<td><strong>EMI before</strong></td>
			<td><strong>EMI after</strong></td>
			<td><strong>Savings/year</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 2 lakh</strong></td>
			<td><strong>Rs 17,592</strong></td>
			<td><strong>Rs 17,546</strong></td>
			<td><strong>Rs 552</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 3 lakh</strong></td>
			<td><strong>Rs 26,389&nbsp;</strong></td>
			<td><strong>Rs 26,319</strong></td>
			<td><strong>Rs 840</strong></td>
		</tr>
		<tr>
			<td><strong>Rs 5 lakh</strong></td>
			<td><strong>Rs 43,981</strong></td>
			<td><strong>Rs 43,865</strong></td>
			<td><strong>&nbsp;Rs 1,392</strong></td>
		</tr>
	</tbody>
</table>

<p><em><strong>(Disclaimer: These are estimates and actual loan rate cuts may vary after RBI reduces repo rate.)</strong></em></p>


Repo rate vs Loan EMI: Reserve Bank of India (RBI) governor Sanjay Malhotra maintained the repo rate at 5.5 per cent in the Monetary Policy Committee (MPC) meeting today. With 3 more MPCs to go for this financial year (FY 25-26), if the central bank cuts the rate, how much may you save on your home, auto and personal loan EMIs? Find out in this write-up.


Repo rate vs Loan EMI: How future RBI repo rate cuts may impact your home, auto and personal loan EMIs

Mutual Fund Return vs Inflation: When we talk about inflation-adjusted returns, two important factors are the annualised investment return and the inflation rate. If a 25-year-old investor gets 12 per cent annualised growth on their investment and the inflation rate is 6 per cent, how large an inflation-adjusted corpus may they create by 60 years of age? See calculations to know-


Mutual Fund Return vs Inflation: How large inflation-adjusted corpus 25-year-old may generate on Rs 10 lakh investment by 60 years of age

DA Hike Calculations: After AICPI data for June 2025 was announced, the DA hike for the July month is set to be 58 per cent. It will be a 3 per cent hike from the current DA rate of 55 per cent. If you are a central government employee with your basic pay in the Rs 20,000-Rs 1,50,000 range, see how much extra you may get in a month after a 3 per cent DA raise!

&nbsp;


July 2025 DA Hike: How much more salary you may get if your basic pay is between Rs 20,000 and Rs 1.5 lakh after 3% increase

<p><strong>HRA Tax Relief for ITR FY 24-25: </strong>In the old tax regime, salaried-class individuals who receive house rent allowance (HRA) as part of their salary may claim tax benefits against the rent paid. But how will you know the maximum tax benefit you can claim? Will it be counted on the basis of the HRA you receive as part of your basic pay or the rent you pay? How is your tax benefit calculated?</p>

<p>What can be the maximum tax benefit if you are getting Rs 50,000 as basic pay that includes Rs 15,000 HRA, and you are paying Rs 12,500 monthly rent for your stay? See our calculations to know!</p>

<h2><strong>HRA tax benefit in old tax regime</strong></h2>

<p>An employee gets a house rent allowance (HRA) from their employer as part of their salary for the rent they are paying for their accommodation.</p>

<p>The HRA received is taxable, but a part of the HRA is tax exempt under Section 10(13A) of the Income Tax Act, 1961.</p>

<p>The tax benefit is applicable to old regime taxpayers, while new regime taxpayers get no such relief.</p>

<p>The tax benefit is different for taxpayers paying rent in metro cities such as Delhi, Kolkata, Mumbai, and Chennai, and taxpayers paying rent in other cities.</p>

<p>For old regime taxpayers, how is the HRA tax benefit calculated?&nbsp;</p>

<h2><strong>HRA tax benefit calculations</strong>&nbsp;</h2>

<p>HRA will be the least of the three amounts-&nbsp;</p>

<p>If you are staying in metro cities</p>

<p>Actual HRA received in year</p>

<p>50 per cent of basic pay</p>

<p>Rent paid- 10 per cent of salary</p>

<h2><strong>If you are staying in non-metro cities</strong></h2>

<p>Actual HRA received in year</p>

<p>40 per cent of basic pay</p>

<p>Rent paid- 10 per cent of salary&nbsp;&nbsp;</p>

<h2><strong>Example of HRA tax benefit</strong></h2>

<p>A taxpayer is getting Rs 60,000 monthly basic pay, receiving Rs 15,000/month HRA, and paying Rs 17,000 a month as rent in a metro and a non-metro city. See how much tax benefit they may get.</p>

<h2><strong>When they are paying rent in a metro city</strong></h2>

<table border="1" cellpadding="0" cellspacing="0" data-sheets-baot="1" data-sheets-root="1" dir="ltr" style="table-layout: fixed; font-size: 10pt; font-family: Arial; width: 0px; border-collapse: collapse; border: none;" xmlns="http://www.w3.org/1999/xhtml">
	<colgroup>
		<col width="138" />
		<col width="100" />
	</colgroup>
	<tbody>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">50% of basic pay in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹360,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA received in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹180,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">Rent paid-10% of basic pay</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹132,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA tax benefit</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹132,000</td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>When they are paying rent in a non-metro city</strong></h2>

<table border="1" cellpadding="0" cellspacing="0" data-sheets-baot="1" data-sheets-root="1" dir="ltr" style="table-layout: fixed; font-size: 10pt; font-family: Arial; width: 0px; border-collapse: collapse; border: none;" xmlns="http://www.w3.org/1999/xhtml">
	<colgroup>
		<col width="138" />
		<col width="100" />
	</colgroup>
	<tbody>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">40% of basic pay in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹288,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA received in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹180,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">Rent paid-10% of basic pay</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹132,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA tax benefit</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹132,000</td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Calculations for story</strong></h2>

<p>We are calculating the maximum HRA tax benefit a taxpayer can avail in the old tax regime if they have a basic monthly salary of Rs 50,000, get an HRA of Rs 15,000/month, and pay a rent of Rs 12,500/month.</p>

<p>We will calculate the tax benefit if the taxpayer is paying the rent in a metro and a non-metro city.&nbsp;</p>

<h2><strong>Tax benefit (for metro city)</strong></h2>

<table border="1" cellpadding="0" cellspacing="0" data-sheets-baot="1" data-sheets-root="1" dir="ltr" style="table-layout: fixed; font-size: 10pt; font-family: Arial; width: 0px; border-collapse: collapse; border: none;" xmlns="http://www.w3.org/1999/xhtml">
	<colgroup>
		<col width="138" />
		<col width="100" />
	</colgroup>
	<tbody>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">50% of basic pay in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹300,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA received in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹180,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">Rent paid-10% of basic pay</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹90,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA tax benefit</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹90,000</td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Tax benefit (for non-metro city)</strong></h2>

<table border="1" cellpadding="0" cellspacing="0" data-sheets-baot="1" data-sheets-root="1" dir="ltr" style="table-layout: fixed; font-size: 10pt; font-family: Arial; width: 0px; border-collapse: collapse; border: none;" xmlns="http://www.w3.org/1999/xhtml">
	<colgroup>
		<col width="138" />
		<col width="100" />
	</colgroup>
	<tbody>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">40% of basic pay in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹240,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA received in a year</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹180,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">Rent paid-10% of basic pay</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹90,000</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom;">HRA tax benefit</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; text-align: right;">₹90,000</td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>


HRA Tax Relief for ITR FY 24-25: In the old tax regime, you get a tax benefit on the house rent allowance (HRA). But how much tax benefit do you get on HRA? If your basic pay is Rs 50,000, HRA is Rs 15,000, and you are paying Rs 12,500 rent, how much tax benefit will you get in a financial year?


HRA Tax Benefit Calculations: Basic pay Rs 50,000; HRA Rs 15,000, and paying rent of Rs 12,500? Know how much tax benefit you may get this financial year

SIP for Wealth Building: Is your monthly SIP investment Rs 1,000, Rs 10,000, Rs 50,000 or Rs 1,00,000? See how much wealth you may create in 10, 20 and 30 years if your annualised investment returns are 10-15 per cent.


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Retirement Planning: Are you 40 years old and want to retire at 60 with Rs 55,000 inflation-adjusted monthly income till 80 years of age? Know how much you may need to invest as a lump sum, yearly, and monthly to achieve that target.


Retirement Planning: Are you 40 years old and want to get Rs 55,000/month at retirement? Know how much you may need to invest one time, yearly and monthly

<p><strong>Gratuity Calculations for Government Employees:</strong> Gratuity is a reward from the employer to their employee for long years of allegiance. Since government employees work for many years or for decades in the majority of cases, they may get quite a substantial gratuity amount on their retirement. The gratuity amount depends on the last-drawn basic pay at retirement, the dearness allowance (DA), and the years of service. How much gratuity may you get if your last-drawn basic pay is Rs 92,000 and the number of service years is 30? See our calculations to know-&nbsp;</p>

<h2><strong>Gratuity for government employees</strong></h2>

<p>Government employees become eligible for gratuity on completion of at least 5 years of service. They get this amount in the form of a lump sum at retirement. Gratuity is of 3 types.</p>

<ul>
	<li><strong>Retirement gratuity</strong></li>
	<li><strong>Death gratuity</strong></li>
	<li><strong>Service gratuity&nbsp;</strong></li>
</ul>

<h2><strong>Retirement gratuity</strong>&nbsp;</h2>

<p>Government employees get it at retirement on completion of 5 years of qualifying service.&nbsp;</p>

<h2><strong>Death gratuity</strong>&nbsp;</h2>

<p>There is no minimum service length required for death gratuity. The deceased's family member or a nominee gets it. The maximum death gratuity amount can be Rs 20 lakh. The amount depends on qualifying service years. The conditions are as follows:&nbsp;</p>

<p>&nbsp;</p>

<table border="1" cellpadding="0" cellspacing="0" data-sheets-baot="1" data-sheets-root="1" dir="ltr" style="table-layout: fixed; font-size: 10pt; font-family: Arial; width: 0px; border-collapse: collapse; border: none;" xmlns="http://www.w3.org/1999/xhtml">
	<colgroup>
		<col width="120" />
		<col width="224" />
	</colgroup>
	<tbody>
		<tr style="height: 21px;">
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(0, 0, 0) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; font-weight: bold; overflow-wrap: break-word; color: rgb(0, 0, 139); text-align: center;">Qualifying Service</td>
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(0, 0, 0) rgb(161, 161, 168) rgb(204, 204, 204); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; font-weight: bold; overflow-wrap: break-word; color: rgb(0, 0, 139); text-align: center;">Rate</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">Less than one year</td>
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">2 times of basic pay</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">One year or more but less than 5 years</td>
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">6 times of basic pay</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">5 years or more but less than 11 years</td>
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">12 times of basic pay</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">11 years or more but less than 20 years</td>
			<td style="border-width: 1px 1px 2px; border-style: solid; border-color: rgb(204, 204, 204) rgb(204, 204, 204) rgb(161, 161, 168); border-image: initial; overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">20 times of basic pay</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">20 years or more</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-family: Verdana; font-size: 11pt; overflow-wrap: break-word; color: rgb(33, 37, 41);">Half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments</td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<h2><strong>Service gratuity&nbsp;</strong></h2>

<p>&nbsp;</p>

<p>A government employee with less than 10 years of qualifying service is not entitled to a pension, but they get a service gratuity in such a case.</p>

<p>Service gratuity is given over and above the retirement gratuity at retirement.</p>

<p>The admissible gratuity amount is half a month’s last-drawn basic pay plus DA for each completed 6 monthly period of qualifying service.</p>

<h2><strong>How is retirement gratuity calculated?</strong></h2>

<p>Retirement gratuity is calculated at 1/4th of a month’s basic pay plus DA drawn on the date of retirement for each completed six monthly period of qualifying service.</p>

<p>The retirement gratuity payable for qualifying service of 33 years or more is 16½ times the basic pay plus DA, up to a limit of Rs 25 lakh.</p>

<p><strong>Gratuity= (BP+DA) X service half years X 1/4</strong></p>

<h2><strong>Gratuity for employee with Rs 92,000 as last-drawn basic pay, 30 years of service</strong></h2>

<p>We are calculating gratuity at the current DA rate of 55 per cent.&nbsp;</p>

<p>Last-drawn basic pay = Rs 92,000</p>

<p>DA at 55% of basic pay = Rs 50,600</p>

<p>Total salary eligible for gratuity calculation = Rs 1,42,600</p>

<p>Half service years = 30X2 = 60</p>

<p>Gratuity amount (estimated) = Rs 21,39,000</p>

<p><em><strong>(Disclaimer: These are projections. Actual calculations may vary slightly.)</strong></em></p>


Gratuity Calculations for Government Employees: Gratuity forms quite a significant part of the retirement benefits of a government employee. They may get up to an Rs 25,00,000 gratuity post retirement. But what will be their gratuity if they retire with an Rs 92,000 last-drawn basic pay and 30 years of service? Know here—


Gratuity for Government Employees: What can be your gratuity on Rs 92,000 last-drawn basic pay and 30 years of service?

<p><strong>New Tax Regime Calculations: </strong>The revised new regime announced in Budget 2025 will be applicable for the income earned in the financial year 2025-26. In the budget, Finance Minister Nirmala Sitharaman increased the tax rebate limit to Rs 60,000, which makes a substantial income in a financial year tax-free. But how does a tax rebate work, when will it apply to your salary, how does it make your salary tax-free, and what's the maximum limit of the salary that can become tax-free after a Rs 60,000 rebate?</p>

<p>Know the answers to these questions in this write-up!</p>

<h2><strong>What is tax rebate?</strong>&nbsp;</h2>

<p>Under Section 87A of the Income Tax Act, the government provides a tax rebate of up to Rs 60,000 in the new tax regime for FY 25-26.</p>

<p>It means if you follow the new tax regime and your tax liability is up to Rs 60,000, you don't need to pay any tax on that income.</p>

<p>A tax rebate is a reduction in the tax amount for a taxpayer.</p>

<p>It provides relief to middle-income earners, inculcating the habit of savings and investment.&nbsp;</p>

<h2><strong>How does tax rebate work?</strong></h2>

<p>If we talk about the new tax regime, here are the different tax slabs under it.&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" style="width:244px;" width="243">
	<colgroup>
		<col />
		<col />
	</colgroup>
	<tbody>
		<tr height="25">
			<td class="rtecenter" colspan="2" height="25" style="height:25px;width:244px;"><strong>New Tax Regime</strong></td>
		</tr>
		<tr height="35">
			<td class="rtecenter" height="35" style="height:35px;width:192px;"><strong>Income Tax Slabs</strong></td>
			<td class="rtecenter" style="width:52px;"><strong>Tax Rate</strong></td>
		</tr>
		<tr height="19">
			<td class="rtecenter" height="19" style="height:19px;width:192px;">Up to Rs. 4,00,000</td>
			<td class="rtecenter" style="width:52px;">NIL</td>
		</tr>
		<tr height="19">
			<td class="rtecenter" height="19" style="height:19px;width:192px;">Rs. 4,00,001 - Rs. 8,00,000</td>
			<td class="rtecenter" style="width:52px;">5%</td>
		</tr>
		<tr height="19">
			<td class="rtecenter" height="19" style="height:19px;width:192px;">Rs. 8,00,001 - Rs. 12,00,000</td>
			<td class="rtecenter" style="width:52px;">10%</td>
		</tr>
		<tr height="33">
			<td class="rtecenter" height="33" style="height:33px;width:192px;">Rs. 12,00,001 - Rs. 16,00,000&nbsp;</td>
			<td class="rtecenter" style="width:52px;">15%</td>
		</tr>
		<tr height="19">
			<td class="rtecenter" height="19" style="height:19px;width:192px;">Rs. 16,00,001 - Rs. 20,00,000</td>
			<td class="rtecenter" style="width:52px;">20%</td>
		</tr>
		<tr height="19">
			<td class="rtecenter" height="19" style="height:19px;width:192px;">Rs. 20,00,001 - Rs. 24,00,000</td>
			<td class="rtecenter" style="width:52px;">25%</td>
		</tr>
		<tr height="19">
			<td class="rtecenter" height="19" style="height:19px;width:192px;">Above Rs. 24,00,000&nbsp;</td>
			<td class="rtecenter" style="width:52px;">30%</td>
		</tr>
	</tbody>
</table>

<p>Now suppose you earn Rs 8 lakh a year.</p>

<p>As per the new tax regime income slabs, you don't need to pay any tax on income up to Rs 4 lakh.</p>

<p>But from Rs 4,00,001 to Rs 8,00,000, you need to pay a 5 per cent tax.</p>

<p>It means your total tax liability on that income is Rs 20,000 (5 per cent of Rs 4,00,000).</p>

<p>But under Section 87A, you will get a tax rebate of Rs 20,000, which will make this income tax-free.</p>

<h2><strong>Tax rebate in old and new tax regimes</strong></h2>

<p>In the old tax regime, the maximum rebate is Rs 12,500.</p>

<p>The reason behind that is there is nil tax on up to Rs 2,50,000 income.</p>

<p>From Rs 2,50,001 till Rs 5,00,000 income, the tax is 5 per cent, which will be Rs 12,500.</p>

<p>A Rs 12,500 tax rebate makes Rs 5 lakh income tax-free.</p>

<p>In the new tax regime applicable for FY24-25, the maximum tax rebate was Rs 25,000.</p>

<p>It is because there was a nil tax on income up to Rs 3 lakh.</p>

<p>From Rs 3,00,001 till Rs 7,00,000, the tax rate was 5 per cent. At that rate, the total tax liability was Rs 25,000.</p>

<p>After a rebate of Rs 25,000, that income became tax-free.&nbsp;</p>

<h2><strong>Tax rebate in new tax regime for FY 25-26</strong></h2>

<p>When Budget 2025 was presented, the limit of the maximum rebate of Rs 25,000 was raised to Rs 60,000 after the tax-free income limit was also revised.&nbsp;</p>

<p>Maximum tax-free income after rebate in new tax regime</p>

<p>The maximum income for which a non-salaried individual doesn't need to pay any tax is Rs 12,00,000. Here's why.</p>

<p>As per the new tax regime tax slabs, here's how tax will apply to Rs 12,00,000 income.</p>

<p><strong>Up to Rs 4,00,000 income- </strong>nil tax</p>

<p><strong>From Rs 4,00,001-Rs 8,00,000 income- </strong>5 per cent- Rs 20,000</p>

<p><strong>From Rs 8,00,001 - Rs 12,00,000 income- </strong>10 per cent- Rs 40,000</p>

<p>Total tax- Rs 60,000</p>

<p>On the same income, the maximum tax rebate applicable is Rs 60,000.</p>

<p>After taking the benefit of this rebate, a maximum income of Rs 12,00,000 effectively becomes tax-free.&nbsp;</p>

<p>It shows that if your income falls in the Rs 4 lakh-Rs 12 lakh bracket, your tax can be up to Rs 60,000, but because of the tax rebate, it will become 0.</p>


New Tax Regime Calculations: In the revised new tax regime applicable for the Financial Year 2025-26, you can get a maximum Rs 60,000 tax rebate under Section 87A of the Income Tax Act. But when do you become eligible to get this tax rebate, and what's the maximum salary limit that can be tax-free through this tax rebate? Know here.


New Tax Regime Calculations: Are you eligible for Rs 60,000 tax rebate in FY25-26? How will you know it?

<p><strong>EPS Pension Calculations: </strong>The Employer Provident Fund (EPF) account of a private sector employee comprises their EPF account and the Employees' Pension Scheme (EPS) account. While they get EPF in the form of a retirement corpus at withdrawal, the EPS amount provides a monthly pension at retirement or prior to it when the employee opts for it. The pension is calculated at the last-drawn pensionable salary and the number of service years. The maximum monthly pension allowed is Rs 7,500. But how an EPF account holder may get it. Read to know-&nbsp; &nbsp;</p>

<h2><strong>What is EPS Pension Scheme?</strong></h2>

<p>The government introduced this retirement benefit pension scheme in 1995 for EPF account holders.</p>

<p>The retirement pension amount depends on the salary and the number of service years.</p>

<p>The EPF account holder doesn't need to contribute separately to their EPS account.</p>

<p>The amount is deducted from their EPF contribution.</p>

<p>They can start getting pension at 58 years of age, which is also the EPF retirement age.</p>

<p>If they want, they may opt for an early pension at a reduced rate or may delay it by a maximum of 2 years to get a higher amount.</p>

<h2><strong>EPS contribution</strong></h2>

<p>The maximum EPF contribution allowed for an EPF account holder is 12 per cent of their basic pay and dearness allowance (DA).</p>

<p>The employer also contributes an equal amount.</p>

<p>But only 3.67 per cent of their amount goes to the employee's EPF account; the rest, 8.33 percent, goes to the EPS account.</p>

<h2><strong>But there is a catch!</strong></h2>

<p>The employer contribution to the employee's EPS account is 8.33 per cent, but the maximum EPS contribution allowed in a month is Rs 1,250, which is equal to Rs 15,000 a year.</p>

<p>It means the maximum pensionable salary to calculate the pension is Rs 15,000.&nbsp;</p>

<p>At the same time, the minimum EPS pension amount is Rs 1,000.</p>

<p>These amounts are applicable for the employees who joined their service from September 2014.</p>

<p>Many labour unions and organisations have been demanding to increase the minimum and maximum EPS pension limits.&nbsp;</p>

<p>While the employee gets a fixed interest on their and the employer's EPF contribution, they get no interest on the employer's EPS contribution.&nbsp;</p>

<h2><strong>Then what happens to the rest of the EPS contribution?</strong>&nbsp;</h2>

<p>The amount over and above Rs 1,250 transfers to the employee's employer EPF contribution.</p>

<p>E.g., if 8.33 per cent of a person's basic salary and DA is Rs 5,000, only Rs 1,250 will go to the employee's EPS account; the remaining Rs 3,750 goes to the employee's EPF account, on which they get the interest as per prevailing rates.</p>

<h2><strong>How is EPS pension calculated?</strong></h2>

<p>The formula to calculate the EPS pension amount is (Pensionable Salary x Pensionable Service)/70</p>

<p>Since the maximum pensionable salary is fixed at Rs 15,000, the number of pensionable service years may determine the pension amount.&nbsp;</p>

<p>E.g., if the pensionable salary is Rs 15,000 and service years are 25, the estimated monthly EPS pension will be Rs 5,357.14.&nbsp;</p>

<p>If the pensionable salary is Rs 10,000 and service years are 10, the estimated monthly EPS pension will be Rs 1,428.57.</p>

<h2><strong>Maximum EPS pension&nbsp;</strong></h2>

<p>As the maximum pensionable salary is fixed at Rs 15,000, the maximum pensionable service years are also fixed at 35.</p>

<p>It means even if service years are 37, the EPS pension will be calculated at 35 years.</p>

<h2><strong>How to get Rs 7,500 EPS pension</strong></h2>

<p>If your pensionable salary is Rs 15,000 and pensionable service years are 35 or above, you can get a Rs 7,500 monthly EPS pension at retirement.&nbsp;</p>

<p><em><strong>(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)</strong></em></p>


EPS Pension Calculations: Employees' Pension Scheme is part of an employee's Employees Provident Fund (EPF) account, where they get a fixed pension at the retirement age of 58. The maximum pension allowed is Rs 7,500. But how can an employee get it?&nbsp;

&nbsp;

&nbsp;


EPS Pension Estimates: How you can get maximum Rs 7,500/month EPS pension after your service

SIP for Daughter's Foreign Education: A lot of parents want their daughters to get the best level of education in India and abroad. But quality education is costly at most places. Do you think an Rs 1 crore inflation-adjusted amount will be sufficient for your newborn daughter to get a foreign education when she turns 18? Know what may be your lump sum (one-time), monthly SIP, and yearly investment to achieve that target.

&nbsp;


SIP for Daughter's Foreign Education: Want to get inflation-adjusted Rs 1 cr for your newborn daughter by her 18th birthday? How much you may need to invest one-time, yearly and monthly

<p><strong>DA Hike for July 2025: </strong>Crores of government employees (including central and state) eagerly wait for the dearness allowance (DA) hike as an increase helps their payouts meet rising inflation. The employees are more keen since this is set to be the last DA hike for the 7th CPC, which is set to end on December 31, 2025.</p>

<p>Since the basic pay of employees remains static in a pay commission, their payout is adjusted to the rising inflation through the DA hike, which happens twice a year.</p>

<p>The last DA hike happened early this year when it reached 55 per cent.</p>

<p>A DA rise this time will further increase the salary of government employees.</p>

<p>But what can be the DA hike in July: 3 per cent or 4 per cent?</p>

<p>It will be known once the June AICPA-IW (All India Consumer Price Index-Industrial Workers) reading comes.</p>

<p>But where it stands at present, see our projections to know.&nbsp;</p>

<h2><strong>How is DA calculated?</strong></h2>

<p>DA for employees is calculated on the basis of AICPA-IW, or CPI-IW. The Labour Bureau of the Ministry of Finance releases this data every month. The Bureau takes the average of 12-month (CPI-IW) data to calculate DA for central government employees.</p>

<h2><strong>Formula to calculate DA</strong></h2>

<p>DA (%) = [(12-month average CPI-IW data (base year 2016)– 261.42) ÷ 261.42] × 100</p>

<p>Here 261.42 is the 12-month average CPI-IW immediately prior to the 7th Pay Commission implementation (January 2015-December 2015).</p>

<p>Anything above this figure indicates inflation.</p>

<h2><strong>AICPI-IW for last 12 months as per the Labour Bureau website-</strong></h2>

<p>The last 12-month average AICPI-IW is 143.3. Here is the table-</p>

<p>&nbsp;</p>

<table border="1" cellpadding="0" cellspacing="0" data-sheets-baot="1" data-sheets-root="1" dir="ltr" style="table-layout: fixed; font-size: 10pt; font-family: Arial; width: 0px; border-collapse: collapse; border: none;" xmlns="http://www.w3.org/1999/xhtml">
	<colgroup>
		<col width="124" />
		<col width="130" />
	</colgroup>
	<tbody>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-size: 12pt; font-weight: bold; overflow-wrap: break-word; text-align: center;">Month</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; font-size: 12pt; font-weight: bold; overflow-wrap: break-word; text-align: center;">AICPA-IW reading</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">June 2024</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">141.4</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">July 2024</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">142.7</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">August 2024</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">142.6</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">September 2024</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">143.3</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">October 2024</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">144.5</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">November 2024</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">144.5</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">December 2024</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">143.7</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">January 2025</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">143.2</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">February 2025</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">142.8</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">March 2025</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">143</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">April 2025</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">143.5</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">May 2025</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">144</td>
		</tr>
		<tr style="height: 21px;">
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">12-month average</td>
			<td style="border: 1px solid rgb(204, 204, 204); overflow: hidden; padding: 2px 3px; vertical-align: bottom; overflow-wrap: break-word; text-align: center;">143.3</td>
		</tr>
	</tbody>
</table>

<p>&nbsp;</p>

<p>Now the thing is that if you apply this average in the formula, the DA will be negative. So how come DA is positive?</p>

<p>&nbsp;</p>

<p>The reason behind this is the change of base year from 2001 to 2016 in October 2020.</p>

<p>When the government released the revised base year of 2016 for the DA calculation in October 2020, it took the AICPA-IW reading of September 2020, which was 118 (as per the new base of 2016), to calculate the revised reading. Under the old base (base year 2001), the same AICPA-IW reading was 33.8.</p>

<p>So, to calculate the DA percentage under the revised base year, the 12-month average was multiplied by 2.88 (118/33.8).</p>

<p>Hence the 143.3 average will become 412.7= 143.3X2.88&nbsp;&nbsp;</p>

<h2><strong>Expected DA at present&nbsp;</strong></h2>

<p>Now, if we put 412.7 in the DA formula&nbsp;</p>

<p>DA (%) = [412.7– 261.42) ÷ 261.42] × 100</p>

<p>The answer will be 57.87 per cent.</p>

<p>Since the government rounds off this percentage, the expected DA hike at present is likely to be 58 per cent.</p>

<h2><strong>Can this be DA for July?</strong></h2>

<p>The June month reading is yet to come. The DA will be calculated once the AICPA-IW reading for June is released.</p>

<h2><strong>How your salary may be revised after DA hike</strong></h2>

<p>The current DA rate stands at 55 per cent.&nbsp;</p>

<p>Suppose you are a central government employee with a basic pay of Rs 30,200. At a 55 per cent DA, you get Rs 16,610 as a dearness allowance. The total salary thus is Rs 46,810.</p>

<p>Assuming a 3 per cent rise in DA, the new dearness allowance will be Rs 17,516. The revised total salary will be Rs 47,716.</p>

<p>It means there will be an increase of Rs 906.</p>

<p><em><strong>(Disclaimer: These are estimates. Actual salary hike after DA hike may differ.)</strong></em></p>

<p>&nbsp;</p>


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<p><strong>SGB Gold Bond vs Gold ETF: </strong>Sovereign Gold Bond's SGB 2020-21 Series-IV-Issue date July 14, 2020 will now be available for early withdrawal (early redemption). The RBI announced it on the 5-year completion of the scheme. SGB investors can redeem their investments at Rs 9,688 per unit of SGB. It is Rs 4,836 higher, or over 99 per cent, than its launch price of Rs 4,852 in July 2020.&nbsp;Sovereign gold bonds (SGBs) invest in gold of very high purity, which is also the case for gold exchange-traded funds (ETF). After 5 years of completion, SGBs can list themselves on the share market. Gold exchange-traded funds (ETFs) also track the price of very high purity physical gold and can also be traded in a share market. Then how are SGB and gold ETFs different? In terms of return from SGB 2020-21 Series-IV and the top gold ETF, which of the two has given a higher return on a Rs 5 lakh investment in the 5-year time frame? See our calculations to know.&nbsp;</p>

<p><strong>Photos: Unsplash/Pexels/Pixabay</strong></p>

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SGB Gold Bond vs Gold ETF: As the Reserve Bank of India (RBI) has informed us that the premature redemption of the Sovereign Gold Bond (SGB 2020-21 Series-IV-Issue date July 14, 2020) will be opened today (Monday, July 14, 2025), let's see how it has performed compared to the top gold ETF in the same period in its 5-year existence.


Shaghil Bilali