The following elements are important for salary computation and its payment:
(A) Grade Pay (GP)
(B) Dearness Allowance (DA)
(C) Transport Allowance (TRA)
(D) Goods and Service Tax (GST)
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B) and (C) only
A salary bill is built from the employee’s earnings (basic pay and allowances) and the deductions made from them (provident fund, professional tax, tax deducted at source).
(A) Grade Pay (GP) — True. It is added to the basic pay according to the employee’s designation and pay band, so it is part of earnings.
(B) Dearness Allowance (DA) — True. It compensates for the rise in prices and is paid as a percentage of basic pay.
(C) Transport Allowance (TRA) — True. It is paid to help the employee commute to the place of work.
(D) Goods and Service Tax (GST) — False. GST is a tax on the supply of goods and services. It is neither an earning nor a deduction from salary, so it plays no part in salary computation.
NCERT (2026-27 edition):
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