Dearness allowance for central government employees and dearness relief for pensioners is 60 percent of basic pay from 1 January 2026, up from 58 percent. DA is revised twice a year, from 1 January and 1 July, based on the 12-month average of the All India Consumer Price Index for Industrial Workers. The revision due from 1 July 2026 had not been announced as of 23 September 2026.
Dearness allowance (DA) is the part of a government employee’s salary that protects it from inflation. Pensioners get the same protection as dearness relief (DR). Because DA is a percentage of basic pay, every revision changes the monthly salary of about a crore of central government employees and pensioners, and state governments usually follow with their own revisions. This guide explains the current rate, how it is worked out, and how it affects your pay.
Current DA rate
| Category | Rate | Effective from |
|---|---|---|
| Central government employees (7th CPC pay matrix) | 60% of basic pay | 1 January 2026 |
| Central government pensioners (dearness relief) | 60% of basic pension | 1 January 2026 |
| Next revision | Due from 1 July 2026 | Not announced as of 23 September 2026 |
The January 2026 increase of 2 percentage points was notified by the Department of Expenditure in March 2026, with arrears for January and February paid along with the revised salary. This delay is normal. The Cabinet usually approves the January revision around March and the July revision around September or October, and the arrears are paid from the effective date.
DA history since 2024
| Effective date | DA rate | Increase |
|---|---|---|
| 1 January 2024 | 50% | 4 points |
| 1 July 2024 | 53% | 3 points |
| 1 January 2025 | 55% | 2 points |
| 1 July 2025 | 58% | 3 points |
| 1 January 2026 | 60% | 2 points |
How DA is calculated
DA is linked to the All India Consumer Price Index for Industrial Workers (AICPI-IW), which the Labour Bureau publishes every month. For central government employees under the 7th Pay Commission, the formula takes the average of the index over the previous 12 months and compares it with the index level at which the 7th CPC pay scales were fixed.
In simple terms:
DA % = [(12-month average AICPI-IW, on base 2001=100) minus 261.42] divided by 261.42, multiplied by 100
The Labour Bureau moved the index to a new base year of 2016=100 in 2020. To keep the formula consistent, the new index is converted to the old base using a linking factor of 2.88 before it goes into the formula. The result is rounded down to a whole number, which is why DA always moves in whole percentage points.
For the January revision, the 12 months ending in December of the previous year are used, and for the July revision, the 12 months ending in June. That is why analysts can estimate the next DA figure once the June or December index is released, but the government’s announcement is what makes it official.
How much DA will you get: an example
| Basic pay | DA at 58% | DA at 60% | Monthly gain |
|---|---|---|---|
| Rs 18,000 (Level 1) | Rs 10,440 | Rs 10,800 | Rs 360 |
| Rs 35,400 (Level 6) | Rs 20,532 | Rs 21,240 | Rs 708 |
| Rs 56,100 (Level 10) | Rs 32,538 | Rs 33,660 | Rs 1,122 |
To work out your own figure, multiply your basic pay by the DA rate. DA is not paid on allowances such as HRA or transport allowance, but transport allowance carries its own DA component under central rules.
DA and house rent allowance
The 7th Pay Commission linked HRA rates to DA. When DA crossed 25 percent, HRA moved from 24, 16 and 8 percent to 27, 18 and 9 percent for X, Y and Z class cities. When DA reached 50 percent on 1 January 2024, HRA rose again to 30, 20 and 10 percent, and several other allowances such as children education allowance and hostel subsidy went up by 25 percent. There is no further automatic HRA step under the 7th CPC rules.
Is DA merged with basic pay at 50 percent?
No. This is a common misunderstanding. The 5th Pay Commission had recommended merging DA above 50 percent, but that was not carried forward. The government told Parliament there was no proposal to merge DA with basic pay when it crossed 50 percent in 2024. DA is merged only when a new pay commission’s pay matrix takes effect, which is expected with the 8th Pay Commission.
DA and the 8th Pay Commission
When the 8th Pay Commission’s recommendations take effect, accumulated DA is absorbed into the new basic pay through the fitment factor and DA restarts from zero. At 60 percent DA, a fitment factor of 1.60 would only neutralise existing DA. Our 8th Pay Commission explainer covers this in detail.
Tax on DA
DA is fully taxable as salary income under the Income-tax Act. For pensioners, dearness relief is taxable as part of pension. DA forming part of retirement benefits is counted as salary for calculating gratuity and, where the terms of employment say so, for provident fund and pension purposes.
State government employees
States set their own DA rates and dates. Many follow the central rate within a few months, while some states pay a lower rate or give it later because of budget constraints. Check your state finance department’s orders for the exact rate that applies to you.
Sources
- Department of Expenditure, Ministry of Finance, Office Memoranda on dearness allowance, 2024 to 2026
- Labour Bureau, Ministry of Labour and Employment, AICPI-IW releases
- Report of the 7th Central Pay Commission, 2015
- Press Information Bureau, Cabinet decisions on DA and DR
Last updated: 23 September 2026.
Frequently asked questions
What is the current DA rate for central government employees?
The DA rate is 60 percent of basic pay from 1 January 2026. Pensioners get dearness relief at the same 60 percent rate.
When is DA revised?
Twice a year, with effect from 1 January and 1 July. The Cabinet usually approves the January revision around March and the July revision around September or October, and arrears are paid from the effective date.
How is DA calculated?
DA is based on the 12-month average of the All India Consumer Price Index for Industrial Workers. The 7th CPC formula compares that average (converted to base 2001=100 using the 2.88 linking factor) with 261.42 and expresses the difference as a percentage, rounded down.
Will DA be merged with basic pay?
Not under the 7th Pay Commission. DA is merged into basic pay only when a new pay commission's pay matrix takes effect, which is expected under the 8th Pay Commission.
Is dearness allowance taxable?
Yes. DA is fully taxable as part of salary, and dearness relief on pension is taxable as part of pension income.