The Union Cabinet on 28 October 2026 approved a 3% hike in Dearness Allowance and Dearness Relief, taking it from 60% to 63% of basic pay or pension from 1 July 2026. A Level 1 employee on ₹18,000 basic gets ₹540 more a month, and arrears for July to October 2026 come to ₹2,160.
Updated 30 October 2026
Quick facts
| Item | Details |
|---|---|
| Official portal | Department of Expenditure for the DA office memorandum; PM India Cabinet decision |
| Helpline | Your office's DDO or pay and accounts office; pensioners can check with the bank or CPAO (cpao.nic.in) |
| Fee | None; it's added to salary and pension automatically |
| Deadline | Effective from 1 July 2026; no application needed |
| Documents | None to apply; keep your pay slip or pension slip to check the new rate |
| Who benefits | About 48.54 lakh Central Government employees and 68.71 lakh pensioners |
| Related posts | How DA is calculated, Life certificate for pensioners |
What did the Cabinet approve on 28 October 2026?
The Union Cabinet chaired by Prime Minister Narendra Modi approved an extra instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from 1 July 2026. The increase is 3% over the existing 60% of basic pay or basic pension, so the new rate is 63%.
The government says the combined cost is ₹10,016.10 crore a year, and the hike follows the accepted formula based on the 7th Central Pay Commission recommendations.
How much more will I get every month?
DA is a percentage of your basic pay (or basic pension for DR). The 3% hike means:
| Pay level / pension | Basic | Old DA at 60% | New DA at 63% | Extra per month |
|---|---|---|---|---|
| Level 1 (entry) | ₹18,000 | ₹10,800 | ₹11,340 | ₹540 |
| Level 6 | ₹35,400 | ₹21,240 | ₹22,302 | ₹1,062 |
| Level 7 | ₹44,900 | ₹26,940 | ₹28,287 | ₹1,347 |
| Level 10 | ₹56,100 | ₹33,660 | ₹35,343 | ₹1,683 |
| Minimum pension | ₹9,000 | ₹5,400 | ₹5,670 | ₹270 |
These use the starting basic of each level. Your basic may be higher if you've had increments, so use the formula below.
Simple formula: Extra per month = your basic × 3 ÷ 100.
How much arrears will I get for July to October 2026?
Since the hike counts from 1 July 2026, you'll get arrears for the months already paid at the old rate. If the new rate shows up from November 2026 salary, arrears cover July, August, September and October 2026, which is four months.
| Basic | Extra per month | Arrears for 4 months |
|---|---|---|
| ₹18,000 | ₹540 | ₹2,160 |
| ₹35,400 | ₹1,062 | ₹4,248 |
| ₹44,900 | ₹1,347 | ₹5,388 |
| ₹56,100 | ₹1,683 | ₹6,732 |
| ₹9,000 pension | ₹270 | ₹1,080 |
The exact month of payout depends on when the Department of Expenditure issues its office memorandum and when your office processes the bill. If the new rate starts later, the arrears just cover more months.
How is DA worked out in the first place?
DA follows the All India Consumer Price Index for Industrial Workers (AICPI-IW) published by the Labour Bureau. Under the 7th Pay Commission formula, the government looks at the average index over twelve months and compares it with a base. The result is rounded down to a whole number and revised twice a year, with the January and July instalments. We broke down the maths in our DA calculation explainer.
Does DA affect other allowances?
Yes, a little. Some allowances like Transport Allowance carry DA on top, so they also go up slightly. Your NPS contribution is based on basic plus DA, so the deduction will rise a bit too, along with the government's share. HRA doesn't change with this hike, because HRA rates change only at certain DA thresholds.
Is DA taxable?
Yes. DA is fully taxable as salary income, and arrears are taxable in the year you receive them. If arrears push you into a higher slab, you can look at relief under Section 89 using Form 10E on the income tax portal.
Does this apply to state government employees?
No. This hike is for Central Government employees and pensioners. State governments announce their own DA revisions, usually after the Centre, but the timing and rate vary. Check your state finance department's orders.
What should I do now, step by step?
1. Do nothing to apply. The hike is automatic.
2. Wait for the office memorandum. The Department of Expenditure issues it after the Cabinet decision.
3. Check your pay slip. Look for DA at 63% and a separate arrears line once your office processes it.
4. Pensioners: check your bank credit. Your pension disbursing bank applies the new DR rate. Look at your pension slip or passbook.
5. If something's wrong, ask your DDO or pay and accounts office first. Pensioners can raise it with the bank's pension cell, or on CPENGRAMS (pgportal.gov.in) if it isn't fixed.
6. Pensioners: submit your life certificate in November 2026. Otherwise pension, including DR, can be held up from December 2026.
Real-life examples
Example 1, a postal assistant at Level 5. Her basic is ₹30,000 after increments. Extra DA is ₹900 a month, and four months of arrears come to ₹3,600.
Example 2, a retired railway employee. His basic pension is ₹25,000. DR goes up by ₹750 a month, with arrears of ₹3,000 for four months.
Example 3, a state teacher. She sees the news but doesn't get the hike, because she's a state government employee. She waits for her state's order.
Checklist for employees and pensioners
☐ Note your current basic pay or basic pension
☐ Work out 3% of it for the monthly increase
☐ Multiply by the months from July 2026 for arrears
☐ Check the pay or pension slip once the hike is processed
☐ Pensioners: submit the life certificate in November 2026
Final reminder
The DA hike is small but it adds up, especially with arrears. Just check that the new rate and arrears actually reach your pay or pension slip, and follow up with your office or bank if they don't. To see what your MP has said about employee and pensioner issues, look them up on NetaSampark's Know Your Neta.
Frequently asked questions
What is the new DA rate from 1 July 2026?
63% of basic pay, up from 60%. Dearness Relief for pensioners also goes up to 63%.
How much will a Level 1 employee get extra?
₹540 a month on a basic of ₹18,000, and ₹2,160 as arrears for July to October 2026.
When will DA arrears be paid?
After the Department of Expenditure's office memorandum, usually with the next salary processed by your office.
Is the DA hike for state government employees too?
No. It covers only Central Government employees and pensioners. States issue their own orders.
How many people benefit?
About 48.54 lakh Central Government employees and 68.71 lakh pensioners, as per the Cabinet decision.
Sources
PM India: Cabinet approves DA to Central Government employees and DR to pensioners, 28 October 2026