Cabinet Approves 3% DA/DR Hike: DA Rises from 60% to 63% w.e.f. 1 July 2026
Benefit for 48.54 lakh central government employees and 68.71 lakh pensioners; pay level-wise increase and arrear tables inside.
Key Points
- The Union Cabinet, chaired by Prime Minister Narendra Modi, approved an additional instalment of DA for employees and DR for pensioners.
- The increase is 3% over the existing 60% of Basic Pay/Pension, effective 1 July 2026.
- The combined burden on the exchequer will be ₹10,016.10 crore per annum.
- About 48.54 lakh employees and 68.71 lakh pensioners will benefit.
- The hike follows the accepted formula based on the 7th Central Pay Commission recommendations.
New Delhi, 28 October 2026: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the release of an additional instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, with effect from 1 July 2026. The Ministry of Finance said the increase is 3% over the existing rate of 60% of Basic Pay or Pension, meant to compensate for price rise.
The combined impact on the exchequer from the increase in both DA and DR will be ₹10,016.10 crore per annum. The decision will benefit about 48.54 lakh Central Government employees and 68.71 lakh pensioners.
The Ministry added that the increase is in accordance with the accepted formula, which is based on the recommendations of the 7th Central Pay Commission. The announcement comes at the close of October, the month in which the July instalment of DA/DR is customarily declared.
Cabinet Decision at a Glance
| Particulars | Details |
|---|---|
| Approved by | Union Cabinet chaired by PM Narendra Modi |
| Announced by | Ministry of Finance (PIB Delhi, 28 Oct 2026, 3:51 PM) |
| Benefit | Additional instalment of DA (employees) and DR (pensioners) |
| Increase | 3% over existing 60% of Basic Pay/Pension |
| New rate | 63% |
| Effective date | 1 July 2026 |
| Annual cost to exchequer | ₹10,016.10 crore (DA + DR combined) |
| Beneficiaries | 48.54 lakh employees and 68.71 lakh pensioners |
| Basis | Accepted formula based on 7th CPC recommendations |
| PIB Release ID | 2329485 |
What the DA Hike Means for Employees
DA is calculated as a percentage of basic pay, so the rupee gain depends on your pay level and basic pay. With DA rising from 60% to 63%, every employee gets an additional 3% of basic pay each month. Because the increase applies from 1 July 2026 and orders are issued in late October, arrears for the intervening months will accumulate until the revised DA is paid in salary.
Monthly increase = Basic Pay × 3%
New DA = Basic Pay × 63%
Arrear = Monthly increase × number of months from 01.07.2026
Example (Level 6, ₹35,400): 35,400 × 3% = ₹1,062 per month. For July–October (4 months) the arrear is ₹4,248.Table 1: Pay Level-wise DA Increase (60% to 63%)
The table uses the entry basic pay of each pay level in the 7th CPC pay matrix.
| Pay Level | Entry Basic Pay | DA @ 60% | DA @ 63% | Monthly Increase |
|---|---|---|---|---|
| Level 1 | ₹18,000 | ₹10,800 | ₹11,340 | ₹540 |
| Level 2 | ₹19,900 | ₹11,940 | ₹12,537 | ₹597 |
| Level 3 | ₹21,700 | ₹13,020 | ₹13,671 | ₹651 |
| Level 4 | ₹25,500 | ₹15,300 | ₹16,065 | ₹765 |
| Level 5 | ₹29,200 | ₹17,520 | ₹18,396 | ₹876 |
| Level 6 | ₹35,400 | ₹21,240 | ₹22,302 | ₹1,062 |
| Level 7 | ₹44,900 | ₹26,940 | ₹28,287 | ₹1,347 |
| Level 8 | ₹47,600 | ₹28,560 | ₹29,988 | ₹1,428 |
| Level 9 | ₹53,100 | ₹31,860 | ₹33,453 | ₹1,593 |
| Level 10 | ₹56,100 | ₹33,660 | ₹35,343 | ₹1,683 |
| Level 11 | ₹67,700 | ₹40,620 | ₹42,651 | ₹2,031 |
| Level 12 | ₹78,800 | ₹47,280 | ₹49,644 | ₹2,364 |
| Level 13 | ₹1,23,100 | ₹73,860 | ₹77,553 | ₹3,693 |
| Level 13A | ₹1,31,100 | ₹78,660 | ₹82,593 | ₹3,933 |
| Level 14 | ₹1,44,200 | ₹86,520 | ₹90,846 | ₹4,326 |
| Level 15 | ₹1,82,200 | ₹1,09,320 | ₹1,14,786 | ₹5,466 |
| Level 16 | ₹2,05,400 | ₹1,23,240 | ₹1,29,402 | ₹6,162 |
| Level 17 | ₹2,25,000 | ₹1,35,000 | ₹1,41,750 | ₹6,750 |
| Level 18 | ₹2,50,000 | ₹1,50,000 | ₹1,57,500 | ₹7,500 |
Table 2: Pay Level-wise DA Arrear (from 1 July 2026)
Arrear is shown for 4 months (July to October 2026), as if the revised DA is paid from the November 2026 salary, and for 5 months (July to November) if it is paid from the December salary.
| Pay Level | Monthly Increase | Arrear: 4 months (Jul–Oct) | Arrear: 5 months (Jul–Nov) |
|---|---|---|---|
| Level 1 | ₹540 | ₹2,160 | ₹2,700 |
| Level 2 | ₹597 | ₹2,388 | ₹2,985 |
| Level 3 | ₹651 | ₹2,604 | ₹3,255 |
| Level 4 | ₹765 | ₹3,060 | ₹3,825 |
| Level 5 | ₹876 | ₹3,504 | ₹4,380 |
| Level 6 | ₹1,062 | ₹4,248 | ₹5,310 |
| Level 7 | ₹1,347 | ₹5,388 | ₹6,735 |
| Level 8 | ₹1,428 | ₹5,712 | ₹7,140 |
| Level 9 | ₹1,593 | ₹6,372 | ₹7,965 |
| Level 10 | ₹1,683 | ₹6,732 | ₹8,415 |
| Level 11 | ₹2,031 | ₹8,124 | ₹10,155 |
| Level 12 | ₹2,364 | ₹9,456 | ₹11,820 |
| Level 13 | ₹3,693 | ₹14,772 | ₹18,465 |
| Level 13A | ₹3,933 | ₹15,732 | ₹19,665 |
| Level 14 | ₹4,326 | ₹17,304 | ₹21,630 |
| Level 15 | ₹5,466 | ₹21,864 | ₹27,330 |
| Level 16 | ₹6,162 | ₹24,648 | ₹30,810 |
| Level 17 | ₹6,750 | ₹27,000 | ₹33,750 |
| Level 18 | ₹7,500 | ₹30,000 | ₹37,500 |
Table 3: Pension-wise DR Increase for Pensioners
Dearness Relief is also 3% higher on basic pension from 1 July 2026. Sample pension amounts are shown below.
| Basic Pension | DR @ 60% | DR @ 63% | Monthly Increase | Arrear: 4 months |
|---|---|---|---|---|
| ₹9,000 | ₹5,400 | ₹5,670 | ₹270 | ₹1,080 |
| ₹15,000 | ₹9,000 | ₹9,450 | ₹450 | ₹1,800 |
| ₹20,000 | ₹12,000 | ₹12,600 | ₹600 | ₹2,400 |
| ₹30,000 | ₹18,000 | ₹18,900 | ₹900 | ₹3,600 |
| ₹40,000 | ₹24,000 | ₹25,200 | ₹1,200 | ₹4,800 |
| ₹60,000 | ₹36,000 | ₹37,800 | ₹1,800 | ₹7,200 |
| ₹1,00,000 | ₹60,000 | ₹63,000 | ₹3,000 | ₹12,000 |
Frequently Asked Questions (FAQs)
1. What DA hike has the Union Cabinet approved?
The Union Cabinet approved an additional instalment of Dearness Allowance for Central Government employees and Dearness Relief for pensioners, an increase of 3% over the existing 60% of Basic Pay/Pension, taking the rate to 63%.
2. From which date is the new DA applicable?
The increase is effective from 1 July 2026, according to the Ministry of Finance release published on 28 October 2026.
3. How many employees and pensioners will benefit?
About 48.54 lakh Central Government employees and 68.71 lakh pensioners will benefit.
4. What is the financial impact on the exchequer?
The combined impact of the increase in DA and DR is ₹10,016.10 crore per annum.
5. How is DA arrear calculated?
Monthly increase = Basic Pay × 3%. Arrear = monthly increase × number of months from 1 July 2026 to the month before the revised DA is paid in salary.
6. Will pensioners get arrears of Dearness Relief?
DR for pensioners is also effective from 1 July 2026 at 3% of basic pension. Payment arrangements will follow the orders issued by the concerned departments.
Conclusion
The Cabinet's approval of a 3% DA/DR increase, effective 1 July 2026, takes the rate from 60% to 63% for about 48.54 lakh employees and 68.71 lakh pensioners, at an annual cost of ₹10,016.10 crore. Employees and pensioners should watch for the detailed Office Memorandum from the Department of Expenditure and the corresponding DR order for payment details and arrear arrangements.
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