DA Hike for Central Government Employees: 3% Increase to 63% from July 2026
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Dearness Allowance for central government employees and Dearness Relief for pensioners rise from 60% to 63% of basic pay/pension, effective 1 July 2026. Here is what it means for your salary, your arrears and the next revision.
Quick answer: The Union Cabinet on 28 October 2026 approved a 3% hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, raising it from 60% to 63% of basic pay/pension with effect from 1 July 2026. About 48.54 lakh employees and 68.71 lakh pensioners benefit, at a cost of ₹10,016.10 crore a year. Arrears from July are paid once the Finance Ministry issues its office memorandum.
What the Cabinet approved
| Item | Details |
|---|---|
| Decision | Additional instalment of DA (employees) and DR (pensioners) |
| New rate | 63% of basic pay / basic pension (was 60%) |
| Effective from | 1 July 2026 |
| Approved on | 28 October 2026 (Union Cabinet) |
| Beneficiaries | About 48.54 lakh central government employees and 68.71 lakh pensioners |
| Annual cost | ₹10,016.10 crore (DA + DR combined) |
| Basis | Accepted formula based on the 7th Central Pay Commission recommendations |
Source: Cabinet approves Dearness Allowance to Central Government employees and Dearness Relief to Pensioners, 28 October 2026.
DA hike calculator: your monthly increase and arrears
Estimate only. DA is paid on basic pay in the Pay Matrix (excluding special pay); NPA, where applicable, also attracts DA. Transport allowance follows the 7th CPC rates (₹7,200/₹3,600 for Level 9+, ₹3,600/₹1,800 for Levels 3–8 and Level 1–2 employees drawing ₹24,200 or more, ₹1,350/₹900 for other Level 1–2) with DA on top. Income tax is not deducted here. Pensioners: choose "No TA" and enter basic pension in place of basic pay.
Salary impact by pay level (entry pay)
A 3-point rise means each employee gets 3% of basic pay more every month. At the first cell of each level:
| Pay level | Entry basic pay | DA at 60% | DA at 63% | Monthly increase | Arrears, Jul–Oct (4 months) |
|---|
Increase excludes DA on transport allowance, which adds 3% of your TA (for example ₹216 a month on ₹7,200 TA).
For pensioners: Dearness Relief at 63%
Dearness Relief rises by the same 3 points, on basic pension (or basic family pension). On the minimum central government pension of ₹9,000, DR goes from ₹5,400 to ₹5,670 — ₹270 more a month. On a basic pension of ₹30,000, DR rises by ₹900 a month. Pensioners also receive DR arrears from 1 July 2026 through their pension-disbursing bank.
Central government DA history (recent revisions)
| Effective from | DA / DR rate | Change |
|---|---|---|
| 1 July 2026 | 63% | +3 |
| 1 January 2026 | 60% | +2 |
| 1 July 2025 | 58% | +3 |
| 1 January 2025 | 55% | +2 |
| 1 July 2024 | 53% | +3 |
| 1 January 2024 | 50% | +4 |
| 1 July 2023 | 46% | +4 |
| 1 January 2023 | 42% | +4 |
When DA reached 50% from January 2024, several allowances were raised automatically: HRA moved to 30%/20%/10% of basic pay for X/Y/Z cities, and Children Education Allowance rose by 25% to ₹2,812.50 a month per child.
How DA is calculated under the 7th Pay Commission
DA for central government employees is revised twice a year — from 1 January and 1 July — using the average of the All-India Consumer Price Index for Industrial Workers (CPI-IW) over the preceding 12 months.
The Labour Bureau now publishes CPI-IW on a 2016=100 base, so each month's index is converted to the 2001 base with the linking factor 2.88. The result is rounded down to a whole number.
Worked example: DA from July 2026
| Month | CPI-IW (2016=100) | × 2.88 (2001 base, rounded) |
|---|
What comes next: DA from January 2027
The January 2027 revision will use CPI-IW for January–December 2026. Eight months are already published (January–August 2026). If the index stays at August's level (154.4) for September–December, the 12-month average works out to about 437.8 on the 2001 base, which gives:
- 28 October 2026 — Cabinet approves DA/DR at 63% from 1 July 2026.
- Next few weeks — Finance Ministry office memorandum; revised DA and July-onwards arrears paid through salary and pension.
- End of each month — Labour Bureau releases CPI-IW; September 2026 is due around 30–31 October.
- Around March 2027 — Decision on DA from 1 January 2027.
Does the 8th Pay Commission change this?
Not yet. The 8th Central Pay Commission was constituted on 3 November 2025 and is still working on its report. Until its recommendations are accepted and implemented, DA continues to be paid on 7th CPC basic pay using the formula above. Read our 8th Pay Commission status update.
Frequently asked questions
What is the latest DA hike for central government employees?
The Cabinet approved a 3% hike on 28 October 2026, raising DA from 60% to 63% of basic pay with effect from 1 July 2026. Pensioners get the same increase in Dearness Relief.
What is the current DA rate for central government employees?
63% of basic pay from 1 July 2026. It was 60% from 1 January 2026.
From which date is the 3% DA hike effective?
From 1 July 2026. Because the decision came in October, employees receive arrears for the months from July until the revised rate starts in their salary.
How much will my salary increase with the 3% DA hike?
By 3% of your basic pay each month, plus 3% of your transport allowance. For example, a Level 1 employee on ₹18,000 basic gets ₹540 more a month; a Level 7 employee on ₹44,900 gets ₹1,347 more.
When will the DA arrears be paid?
Arrears are paid after the Department of Expenditure issues its office memorandum implementing the Cabinet decision, usually with the next salary cycle. They cover the months from 1 July 2026 until the new rate is included in regular pay.
Is the DA hike applicable to pensioners?
Yes. Dearness Relief for central government pensioners and family pensioners also rises from 60% to 63% of basic pension from 1 July 2026.
What will be the DA from January 2027?
Based on CPI-IW data published up to August 2026, DA from January 2027 is expected to be around 67%. The final figure depends on the September–December 2026 indices and is announced by the government, usually around March.
Is DA taxable?
Yes. Dearness Allowance is fully taxable as salary income. DR is taxable as part of pension income. Arrears are taxable in the year received; relief may be claimed for arrears relating to earlier years.
Does the DA hike apply to state government employees?
No. Each state government decides its own DA. Many states follow the central rate after a gap, but the central decision applies only to central government employees and pensioners.
Related on Arthzo
Disclaimer: This page explains the Cabinet decision in simple terms for information only. Your actual DA, arrears and deductions are determined by the Department of Expenditure's office memorandum and your department's payroll. Estimates for future DA are Arthzo projections, not official figures.