7th Pay Commission latest news today: Central government employees alert! Check how your 7th CPC salary will change if this happens

7th Pay Commission latest news today: The central government employees' 7th CPC (Central Pay Commission) pay and allowances may get changed from 1st April 2021. 

ZeeBiz WebTeam | Mar 05, 2021, 09:05 AM IST

7th Pay Commission latest news today: The central government employees' 7th CPC (Central Pay Commission) pay and allowances may get changed from 1st April 2021. The reason for this change in one's Provident Fund (PF), Gratuity, Dearness Allowance, Travel Allowance (TA), House Rent Allowance (HRA), etc. getting changed if this move by teh Centre goes through. The move aims to contain employees allowance within 50 per cent of net CTC. That means one's basic salary would become at least 50 per cent of a central government servant's net CTC. As per the tax and investment experts, a central government employees basic salary has direct impact on PF and Gratuity while allowance like DA, TA, HRA plays a major role in earnings too. So, a central government and private sector employees' PF, Gratuity, DA, TA, HRA, etc. will get changed if the New Wage Code 2021 is implemented from 1st April 2021.

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What is Center's move

What is Center's move

Center is mulling to introduce New Wage Code Bill 2021 from 1st April 2021. Finance Minister Nirmala Sitharaman has already made an announcement in this regard while presenting the Union Budget 2021 in the parliament. If the New Wage Code Bill gets implemented, a central government servants' allowances like Dearness Allowance (DA), House Rent Allowance (HRA), Travel Allowance (TA), etc. won't be more than 50 per cent of their net CTC. Photo: Reuters

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Change in PF contribution

Change in PF contribution

If the New Wage Code Bill 2021 is implemented from 1st April, one's monthly PF contribution will get changed as one's PF contribution is calculated from the basic salary plus Dearness Allowance (DA). As noth variables of the PF contributions will get changed, the PF contribution and the PF passbook balance is bound to change if the New Wage Code Bill 2021 is implemented from 1 st April. Photo: Reuters

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Change in Gratuity

Change in Gratuity

Like PF contribution, one's Gratuity contribution is also expected to change as it is also calculated from one's basic salary and DA. Photo: Reuters

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7th CPC Allowance — HRA, DA, TA to change as well

7th CPC Allowance — HRA, DA, TA to change as well

On how the New Wage Code will lead to change in the monthly allowances like DA, TA, HRA, etc. SEBI registered tax and investment expert Jitendra Solanki said, "The New Wage Code caps the allowance head at 50 per cent of the net monthly CTC, which means one's monthly allowance can't be more than 50 per cent of its net CTC. Since DA, TA, HRA, etc. fall under the allowance heads. They are bound to get affected once the New Wage Act 2021 gets implemented." Photo: Reuters

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New Wage Code Bill latest update

New Wage Code Bill latest update

Since, the central government is in the process of finalising the wage code, it is not clear whether the monthly salary of a government or a private employee (having EPF account) will go up or down due to new monthly contribution of the PF, EPF and Gratuity, but it's for sure that one's PF, EPF and Gratuity contribution will change. Photo: Reuters