DA Hike July 2026: 3% Approved, DA Now 63% With Arrears

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It is now official. On 28 October 2026, the Union Cabinet approved a 3 percentage point increase in Dearness Allowance (DA) for central government employees and in Dearness Relief (DR) for pensioners, effective from 1 July 2026. DA and DR go up from 60% to 63% of basic pay or basic pension. Here is what the hike means for your pay slip, how arrears will work, how the rate was calculated, and where the 8th Pay Commission stands.

DA hike July 2026: what the Cabinet approved

According to the PIB release of 28 October 2026, the Cabinet approved “an additional instalment of Dearness Allowance (DA) to Central Government employees and Dearness Relief (DR) to pensioners w.e.f. 01.07.2026”, which is an increase of 3% over the existing rate of 60%.

Source: PIB, “Cabinet approves Dearness Allowance to Central Government employees and Dearness Relief to Pensioners”, 28 October 2026.

Media reports, including Economic Times coverage, say DA was also raised for staff still on older pay scales, effective 1 July: from 262% to 269% for the 6th Pay Commission scale and from 483% to 497% for the 5th Pay Commission scale. The Department of Expenditure’s office memorandum gives the binding details, so check it when it comes out.

How the 63% figure was worked out (AICPI-IW)

DA is linked to the 12-month average of the All India Consumer Price Index for Industrial Workers (AICPI-IW), which the Labour Bureau publishes. For the July 2026 revision, the reference period is July 2025 to June 2026. Based on the index values reported by Economic Times:

The 12-month average comes to about 148.65. Under the formula, that works out to a DA of roughly 63.76%. DA is always rounded down to a whole number, so the rate is 63%. The government revises DA twice a year, with effect from 1 January and 1 July, but usually announces the July instalment around September or October.

Salary impact: examples by pay level

The extra DA each month is 3% of your basic pay. Here is what that means at the entry basic pay of selected 7th CPC levels:

For your own figure, multiply your basic pay by 0.03. Someone on a basic of ₹50,000 gets ₹1,500 more a month. DA is fully taxable as salary income.

Arrears: how much and when

The hike applies from 1 July 2026 but was approved on 28 October, so employees and pensioners are owed arrears for the months in between. The Cabinet release does not give a payment date. Media reports expect arrears for July to October to be paid with the revised pay, most likely in the November salary cycle. Treat the exact credit date as unconfirmed until your department’s pay office acts on the Finance Ministry’s order.

Rough arrears, assuming four months (July to October) at 3% of basic pay:

• Basic ₹18,000: ₹540 × 4 = ₹2,160
• Basic ₹44,900: ₹1,347 × 4 = ₹5,388
• Basic ₹56,100: ₹1,683 × 4 = ₹6,732

If the revised rate is first paid with November’s pay, October may be paid at 63% directly, which shifts the split between arrears and regular pay but not the total. Arrears are taxed in the year you receive them. Relief under Section 89 may be available if they push you into a higher slab.

Pensioners: Dearness Relief also rises to 63%

Central government pensioners and family pensioners get the same 3-point increase in DR, from 60% to 63% of basic pension, also from 1 July 2026. A pensioner with a basic pension of ₹9,000 (the minimum) gets ₹270 more a month. Someone on ₹30,000 gets ₹900 more. Banks and the CPAO apply the revised DR after the order is issued, with arrears following the same pattern as for employees.

Pensioners should also keep their annual life certificate up to date. Pension, and with it DR, can be held back if the Jeevan Pramaan is not submitted by the deadline.

What this does not cover

• State government employees. States announce their own DA. The central decision does not automatically apply to them.
• Bank and PSU staff. Their DA follows separate wage settlements, or Department of Public Enterprises orders for CPSE executives.

8th Pay Commission: where things stand

The government set up the 8th Central Pay Commission by a resolution dated 3 November 2025, chaired by Justice Ranjana Prakash Desai. Its terms of reference give it 18 months to report, which points to around May 2027. In Lok Sabha replies on 10 August 2026, the Finance Ministry said the commission “has not submitted its recommendations to the Government yet”. No fitment factor, pay matrix or implementation date has been fixed. The commission is still holding consultations, including a visit to Mumbai on 22-23 October 2026.

So any fitment factor or new-salary figure you see online is speculation. When a new pay commission is implemented, accumulated DA is usually merged into the revised basic pay and DA starts again from zero. Until that happens, DA revisions under the 7th CPC formula continue every six months. The next one is due from 1 January 2027 and has not been announced.

Bottom line

DA and DR are now officially 63% from 1 July 2026, with arrears due for the months before the order. The monthly gain is 3% of your basic pay or pension: ₹540 at the entry level, rising with your pay. Wait for the Finance Ministry’s office memorandum and your pay office for the exact credit date. For more on money matters this festive season, see our guides to Muhurat trading 2026 and the PM Kisan 24th instalment, and our explainer on why sugar prices have spiked.