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The Dearness Allowance (DA) is a calculation on inflation and allowance paid to government employees (including public sector unit employees as public sector unit employees are also government employees) and pensioners in India, Bangladesh and Pakistan.
Dearness Allowance is calculated as a percentage of an Indian citizen's basic salary to mitigate the impact of inflation on people. Indian citizens may receive a basic salary or pension that is then supplemented by a housing or a dearness allowance, or both. The guidelines that govern the Dearness Allowance vary according to where one lives. Dearness Allowance is a fully taxable allowance. The two types of Dearness Allowance are: