DA Hike 2026 Latest News: Central government employees and pensioners have received a major financial benefit ahead of Diwali. The Union Cabinet has approved a 3% increase in Dearness Allowance (DA) and Dearness Relief (DR), raising the existing rate from 60% to 63%.

The decision was announced on Wednesday, October 28, 2026, and will take effect from July 1, 2026.

This means eligible central government employees will receive additional DA based on their basic salary, while pensioners will benefit from higher Dearness Relief.

Union Minister Ashwini Vaishnaw announced the decision following the Cabinet meeting. The government has estimated the combined annual financial impact of the increase at approximately ₹10,016 crore.

For employees wondering how much their monthly salary will increase, the calculation is straightforward.

A person earning ₹18,000 in basic pay will receive ₹540 more every month. Meanwhile, an employee with a basic salary of ₹1 lakh will receive an additional ₹3,000 monthly.

Here is the complete salary calculation, along with details about arrears and pension benefits.

Cabinet Approves 3% DA and DR Hike

The Union Cabinet has approved a three-percentage-point increase in Dearness Allowance for central government employees.

A corresponding increase has also been approved in Dearness Relief for eligible pensioners.

Before this decision, the applicable DA and DR rate was 60%.

Following the revision, the rate will increase to 63%.

DA Hike 2026: Key Details

The revision follows the approved mechanism based on the recommendations of the 7th Central Pay Commission.

Earlier in 2026, a 2% increase had taken the DA rate to 60%. The latest revision raises it further to 63%.

How Much Will Your Salary Increase After the DA Hike?

The additional DA depends on an employee's basic salary.

Employees with higher basic pay will receive a larger increase in rupee terms.

For example, a person earning ₹25,500 in basic pay previously received ₹15,300 as DA at 60%.

Under the revised rate of 63%, the DA amount becomes ₹16,065.

Therefore, the monthly increase is ₹765.

Similarly, an employee with a basic salary of ₹50,000 will receive ₹1,500 more every month.

DA Hike Salary Calculation Table

The table shows the increase in Dearness Allowance, not the final change in take-home salary.

Other salary components, taxes and deductions may affect the amount credited to an employee's bank account.

How to Calculate the 3% DA Increase Yourself

Employees do not need a complicated calculator to determine their additional DA.

They can use the following formula:

Monthly DA Increase = Basic Salary × 3 ÷ 100

For example, suppose an employee receives ₹35,400 as basic salary.

The calculation will be:

₹35,400 × 3 ÷ 100 = ₹1,062

Therefore, the employee will receive an additional ₹1,062 every month.

The old DA was ₹21,240, while the revised DA becomes ₹22,302.

The difference between these two amounts is the monthly financial benefit.

How Much Extra Money Will Employees Receive in One Year?

Although a monthly DA increase may appear modest, the amount becomes more significant when calculated over 12 months.

An employee receiving ₹540 more every month will earn an additional ₹6,480 over a full year at the revised rate.

Similarly, someone receiving ₹1,683 more monthly will benefit by ₹20,196 annually.

Annual DA Benefit Calculation

These calculations assume the basic salary and DA rate remain unchanged for the entire 12-month period.

Will Central Government Employees Receive DA Arrears?

Yes. The revised rate is effective from July 1, 2026, even though the Cabinet approved the increase on October 28.

As a result, eligible employees will receive the difference between the old and revised DA rates for the applicable period.

The exact arrears amount will depend on the months covered by the payment and the employee's basic salary during those months.

For illustration, if arrears are payable for July, August, September and October, an employee with ₹18,000 basic pay would receive:

₹540 × 4 = ₹2,160

An employee with ₹56,100 basic pay would receive:

₹1,683 × 4 = ₹6,732

Estimated Four-Month DA Arrears

These figures are illustrative. If October's salary already includes the revised DA, only the preceding unpaid months would normally form part of the arrears calculation.

How Will Pensioners Benefit From the DR Hike?

The Cabinet decision also benefits central government pensioners through higher Dearness Relief.

DR is calculated on the eligible basic pension.

For example, a pensioner receiving ₹20,000 as basic monthly pension previously received ₹12,000 as DR at 60%.

After the increase to 63%, the DR amount becomes ₹12,600.

This means an additional ₹600 every month.

Similarly, a pensioner with a basic pension of ₹30,000 will receive ₹900 more per month.

The actual benefit depends on the pensioner's eligible basic pension and applicable rules.

Why Does the Government Revise DA Twice a Year?

Dearness Allowance helps government employees manage the impact of rising prices.

The government generally revises DA and DR twice a year, with changes effective from January 1 and July 1.

These revisions are linked to the applicable inflation-index calculation, including the All India Consumer Price Index for Industrial Workers.

The objective is to provide relief against changes in the cost of living.

The January 2026 revision raised DA to 60%, while the July 2026 revision has now increased it to 63%.

Does the DA Hike Increase Basic Salary?

No. The latest decision increases Dearness Allowance, not the employee's basic pay.

For example, an employee with a basic salary of ₹40,000 will continue to have the same basic salary solely as a result of this DA revision.

However, their DA increases from ₹24,000 to ₹25,200.

This provides an additional ₹1,200 per month.

Any future change in basic salary would depend on increments, promotions, pay revisions or other applicable government decisions.

What About the 8th Pay Commission?

Central government employees are also waiting for developments concerning the 8th Central Pay Commission.

The commission is expected to review pay structures and related matters under its terms of reference.

Employee organisations have raised demands regarding the fitment factor and salary revisions.

However, no particular fitment factor should be treated as approved until the government announces a final decision.

The latest 3% DA hike is separate from any future recommendations of the 8th Pay Commission.

Final Update

The Central Government's decision to increase DA and DR from 60% to 63% will provide additional monthly income to eligible employees and pensioners.

The revision takes effect from July 1, 2026, making eligible beneficiaries entitled to applicable arrears.

An employee with ₹18,000 basic pay will receive ₹540 more per month, while someone earning ₹1 lakh in basic pay will receive an additional ₹3,000 monthly.

Employees can calculate their exact monthly DA increase by multiplying their basic salary by 3 and dividing the result by 100.

The final salary credit and arrears payment will depend on the applicable payroll instructions and individual salary details.