Friend, This is a very common disease and is becoming serious day by day. The main reason for the disease is a small microscopic mite which lives and breeds inside the skin of your animal. You need to take a step by step approach to get rid of the disease.
1. Get your dog de-wormed after consulting your vet.
2. clean your house with a vaccum cleaner if possible.
3. Your dog needs to be on ivermectine (injection or Tablets) in consultation with your vet regarding dose.
4. Your dog needs to be bathed every 15 days followed by amitraz dip (eg. RIDD) in consulation with your vet. generally 3 - 4 dips are enough.
5. During these days, you dog needs to be kept in a very clean hygenic place and needs to be administered with a liver tonic. An application of anti fungal cream (consult your vet for the name) in the affected area would be essential.
Need to follow the regeime religiously and results would come.