Explanation:

- Option 1: Dearness Allowance

- This is part of the employee's salary or wage that is adjusted for inflation. It is a direct component of compensation and is given to manage cost of living increases.

- Correct Answer

- Option 2: Tools given to employees to be used during work

- These are not considered part of employee compensation. Instead, they are provided to complete tasks effectively.

- Option 3: Payment by insurance company to an injured employee

- This is a form of insurance settlement and not considered part of regular employee compensation.

- Option 4: Contribution by employee to provident fund

- This is a deduction from the employee's salary for future savings and not a direct component of compensation.

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