7th Pay Commission: SALARIED CLASS? This new Bill to affect your salary, DA, TA, HRA—check how
7th Pay Commission Latest News Today: The Centre has been planning to implement New Wage Code Bill 2021 from April 1, 2021.
In case this new Bill is executed, it will have a direct impact on the central government employees’ salary, provident fund and gratuity. Moreover, the private sector employees’ salary will also be impacted.
New Wage Code Bill 2021
As per the Wage Code Bill 2021, an employee’s monthly basic salary can’t be less than 50 per cent of the net CTC. In other words, the Central government’s New Wage Code Bill 2021 will not allow employees’ allowances such as Dearness Allowance (DA), House Rent Allowance (HRA), Travel Allowance (TA), etc. to be more than 50 per cent of net CTC. Source: PTI
What experts say?
Tax and investment experts say that a central government employee’s basic salary has direct impact on PF and Gratuity while allowance like DA, TA, HRA plays a major role in one’s salary. So, a central government and private sector employees’ PF, Gratuity, DA, TA, HRA will get changed if the New Wage Code 2021 is implemented from April 1, 2021. Source: PTI
Impact on PF, gratuity
Government yet to make official announcement
7th CPC Allowance
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." Source: Reuters