The Union Cabinet has approved a 3-percentage-point increase in Dearness Allowance (DA) for Central Government employees, taking the rate from 60% to 63% of basic pay. The revised rate will be effective from July 1, 2026, providing additional financial relief to employees in response to inflation.
According to the Ministry of Finance release dated October 28, the increase follows the established formula based on the recommendations of the 7th Central Pay Commission (CPC). The actual monthly benefit will depend on an employee’s basic pay and applicable pay level.
How Much Will Salary Increase After the DA Hike?
DA is calculated as a percentage of basic pay. With the rate rising from 60% to 63%, employees will receive an additional amount equal to 3% of their basic pay each month.
The formula used to calculate DA is:
DA amount = Basic pay × DA rate ÷ 100
The table below shows the revised DA amounts and the additional monthly benefit across selected pay levels under the 7th CPC pay matrix.
| Pay Level | Basic Pay | DA at 60% | DA at 63% | Monthly Increase |
|---|---|---|---|---|
| 1 | ₹18,000 | ₹10,800 | ₹11,340 | ₹540 |
| 2 | ₹19,900 | ₹11,940 | ₹12,537 | ₹597 |
| 3 | ₹21,700 | ₹13,020 | ₹13,671 | ₹651 |
| 4 | ₹25,500 | ₹15,300 | ₹16,065 | ₹765 |
| 5 | ₹29,200 | ₹17,520 | ₹18,396 | ₹876 |
| 6 | ₹35,400 | ₹21,240 | ₹22,302 | ₹1,062 |
| 7 | ₹44,900 | ₹26,940 | ₹28,287 | ₹1,347 |
| 8 | ₹47,600 | ₹28,560 | ₹29,988 | ₹1,428 |
| 9 | ₹53,100 | ₹31,860 | ₹33,453 | ₹1,593 |
| 10 | ₹56,100 | ₹33,660 | ₹35,343 | ₹1,683 |
| 11 | ₹67,700 | ₹40,620 | ₹42,651 | ₹2,031 |
| 12 | ₹78,800 | ₹47,280 | ₹49,644 | ₹2,364 |
| 13 | ₹1,23,100 | ₹73,860 | ₹77,553 | ₹3,693 |
| 14 | ₹1,44,200 | ₹86,520 | ₹90,846 | ₹4,326 |
| 15 | ₹1,82,200 | ₹1,09,320 | ₹1,14,786 | ₹5,466 |
| 16 | ₹2,05,400 | ₹1,23,240 | ₹1,29,402 | ₹6,162 |
| 17 | ₹2,25,000 | ₹1,35,000 | ₹1,41,750 | ₹6,750 |
| 18 | ₹2,50,000 | ₹1,50,000 | ₹1,57,500 | ₹7,500 |
The figures are based on the civilian employee pay matrix outlined in the Ministry of Finance resolution dated May 16, 2017. Actual benefits depend on the employee’s applicable basic pay.
Examples of Monthly DA and Six-Month Arrears
For an employee in Pay Level 1 with a basic salary of ₹18,000, DA at the previous rate of 60% amounts to ₹10,800 per month. At the revised rate of 63%, the amount rises to ₹11,340, giving the employee an additional ₹540 every month.
As the revised rate takes effect from July 1, 2026, the additional DA for the six-month period from July through December would total ₹3,240, assuming the same basic pay applies throughout the period.
Similarly, an employee in Pay Level 5 with a basic pay of ₹29,200 currently receives ₹17,520 as DA at 60%. Under the revised rate, the monthly amount will increase to ₹18,396, resulting in an additional ₹876 per month. Over six months, this would amount to ₹5,256 in additional DA.
The final amount credited as arrears will depend on the applicable period and the government’s payroll processing arrangements.
What the DA Revision Means for Employees
The revised DA is calculated on basic pay, not on the employee’s entire salary package. Allowances such as house rent allowance (HRA) and transport allowance are not included in the DA calculation itself.
Employees should also distinguish between the increase in their monthly DA entitlement and the amount actually credited to their bank accounts. Although the revised rate is effective from July 1, 2026, the timing and calculation of arrears will depend on the applicable official instructions and payroll processing.
Disclaimer: This article is intended for general informational purposes only and is based on the details provided in the source material. The salary examples are illustrative and may not reflect every employee’s individual entitlement. Employees should refer to the relevant official Ministry of Finance notification or government order for confirmed rates, eligibility and arrears details.