The Ministry of Finance has approved a 2% hike in Dearness Allowance (DA) for central government employees, raising it from 58% to 60% of Basic Pay. The revised rates are effective from January 1, 2026, following approval by the President based on a proposal dated October 6, 2025.

The increase will benefit nearly 50 lakh central government employees and about 65 lakh pensioners, including defence personnel and retirees. The revised DA will also apply to civilian employees paid from Defence Services estimates, with separate orders expected for armed forces and railway staff. 8th Pay Commission Salary Hike: Will Minimum Pay Reach INR 72,000?

What is Dearness Allowance (DA)?

Dearness Allowance is a cost-of-living adjustment paid to government employees and pensioners to offset inflation. It is revised twice a year based on the All-India Consumer Price Index (AICPI), typically in March and October, with effect from January and July. 8th Pay Commission News: Stakeholder Meetings To Begin in Delhi on April 28.

Salary Increase After 2% DA Hike

Employee Level Basic Pay (INR) Current Salary (INR) Salary After Hike (INR) Increase (INR)
Level 1 18,000 28,440 28,800 360
Level 2 19,900 31,442 31,840 398
Level 3 21,700 34,286 34,720 434
Level 4 25,500 40,290 40,800 510
Level 5 29,200 46,136 46,720 584
Level 6 35,400 55,932 56,640 708
Level 7 44,900 70,942 71,840 898
Level 8 47,600 75,208 76,160 952
Level 9 53,100 83,898 84,960 1,062
Level 10 56,100 88,638 89,760 1,122
Level 11 67,700 106,966 108,320 1,354
Level 12 78,800 124,504 126,080 1,576
Level 13 123,100 194,498 196,960 2,462
Level 13A 131,100 207,138 209,760 2,622
Level 14 144,200 227,836 230,720 2,884
Level 15 182,200 287,876 291,520 3,644
Level 16 205,400 324,532 328,640 4,108
Level 17 225,000 355,500 360,000 4,500
Level 18 250,000 395,000 400,000 5,000

How DA is Calculated

DA is calculated as a percentage of Basic Pay under the 7th Pay Commission framework. Basic Pay refers only to the pay drawn in the prescribed Pay Matrix level and excludes special pay or allowances. Any DA amount involving 50 paise or more is rounded up to the next rupee, while amounts below 50 paise are ignored.

Who Will Benefit?

The DA hike will directly increase monthly take-home salaries and pensions, offering partial relief against rising inflation. Government employees, defence personnel, and pensioners will all benefit from this revision.

With inflation trends remaining a key concern, further revisions in DA are expected later in 2026 as per the biannual review cycle.

(The above story first appeared on LatestLY on Apr 27, 2026 07:31 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).