# DA hike July 2026: 3% rise to 63% — how much more salary you get > The Cabinet approved a 3% DA and DR hike on 28 October 2026, taking dearness allowance to 63% from 1 July 2026. Salary and pension examples, arrears and how DA is calculated. - URL: https://2search.in/knowledge/articles/oct-26/da-hike-july-2026 - Genre: Personal finance - Country: India - Published: 2026-10-29 - Updated: 2026-11-13 - Publisher: 2search (https://2search.in) > **Quick answer:** On **28 October 2026**, the Union Cabinet approved a **3 percentage-point hike in dearness allowance (DA) and dearness relief (DR)**, raising it from **60% to 63%** of basic pay or basic pension, **effective 1 July 2026**. It benefits about **48.54 lakh central government employees** and **68.71 lakh pensioners**, at a cost of about **₹10,016 crore a year**. The **Department of Expenditure issued the office memorandum** right after; it says arrears **can't be paid before October's salary is disbursed**, so most employees get the higher DA and **four months of arrears (July–October) with the November salary**. > **Key takeaways** > - DA is now **63% of basic pay** (Level-wise basic under the 7th Pay Commission). > - For a basic pay of **₹18,000**, DA rises by **₹540 a month**. > - Arrears are paid for **July, August, September and October 2026** (four months). > - Pensioners get the same **3% DR** on their basic pension. > - DA is fully **taxable** as salary income. ## DA hike at a glance | Detail | Information | | --- | --- | | Approved on | **28 October 2026** (Union Cabinet) | | Hike | **3 percentage points** | | New DA / DR | **63%** (was 60%) | | Effective from | **1 July 2026** | | Employees covered | About **48.54 lakh** | | Pensioners covered | About **68.71 lakh** | | Yearly cost | About **₹10,016 crore** | | Basis | 7th Central Pay Commission formula | ## How much more will you get? (examples) DA is calculated on **basic pay** only (not on HRA or other allowances). | Basic pay (monthly) | DA at 60% | DA at 63% | Extra per month | Arrears (4 months) | | --- | --- | --- | --- | --- | | ₹18,000 (Level 1) | ₹10,800 | ₹11,340 | **₹540** | ₹2,160 | | ₹25,500 (Level 4) | ₹15,300 | ₹16,065 | **₹765** | ₹3,060 | | ₹35,400 (Level 6) | ₹21,240 | ₹22,302 | **₹1,062** | ₹4,248 | | ₹56,100 (Level 10) | ₹33,660 | ₹35,343 | **₹1,683** | ₹6,732 | | ₹78,800 (Level 12) | ₹47,280 | ₹49,644 | **₹2,364** | ₹9,456 | | ₹1,23,100 (Level 13) | ₹73,860 | ₹77,553 | **₹3,693** | ₹14,772 | > **Example (pensioner):** A basic pension of **₹20,000** gets DR of ₹12,600 at 63%, up from ₹12,000 — **₹600 more a month**, plus about **₹2,400** in arrears. Arrears assume the new rate is paid from the November salary; if it's paid later, arrears cover more months. ## How DA is calculated DA is revised **twice a year** — from **1 January** and **1 July** — to protect pay from inflation. The government uses the **All-India Consumer Price Index for Industrial Workers (AICPI-IW)** published by the Labour Bureau. Under the 7th Pay Commission formula, the DA percentage is based on the average index over the previous 12 months compared with the base. The decision is usually announced **a few months late** — the January hike around March, and the July hike around October, often before Diwali. ## When will the new DA be paid? - **Done:** the Department of Expenditure issued the office memorandum on 28–29 October 2026, revising DA to 63% from 1 July. - The memorandum says **arrears can't be paid before October's salary**. Pay offices are therefore adding the new rate and the **July–October arrears to the November salary** (paid at the end of November or early December). - Pensioners get DR arrears through their pension-disbursing bank or CPAO in the same cycle. - If your November payslip doesn't show the arrears, ask your DDO or pay office — some departments process them a month later. ## Do state government employees get it too? Not automatically. Each **state government** decides its own DA rate and timing. Many states follow the Centre's hike later; some pay a different rate. ## Tax on DA and arrears - DA is **fully taxable** as part of salary. - **Arrears** are taxed in the year you receive them. If arrears push you into a higher slab, you can claim **relief under section 89** (file **Form 10E** on the income tax portal before claiming it in your return). - Under the [new tax regime](/new-vs-old-tax-regime-india), salaried income up to ₹12.75 lakh is tax-free after the standard deduction. ## What about the 8th Pay Commission? The **8th Central Pay Commission** will review pay, allowances and pensions for central government staff. Until its recommendations are accepted and put into effect, DA continues under the **7th Pay Commission** formula. When a new pay commission starts, DA is usually merged into basic pay and reset to zero. ## Frequently asked questions ### What is the new DA rate after the July 2026 hike? 63% of basic pay, up from 60%, effective 1 July 2026. ### When was the DA hike approved? The Union Cabinet approved it on 28 October 2026. ### How many months of DA arrears will I get? Arrears are due from July 2026 until the month the new rate is paid — typically four months (July to October). ### Is DA calculated on basic pay or gross salary? On basic pay only (for pensioners, on basic pension). ### Do pensioners get the DA hike? Yes. Pensioners get dearness relief (DR) at the same 63%. ### Is DA taxable? Yes, DA is fully taxable as salary. Relief under section 89 can reduce extra tax on arrears. ### When is the next DA hike? The next revision is due from 1 January 2027, usually announced around March 2027. ## Sources - [IndianPSU — DA raised to 63%; arrears not before October salary](https://indianpsu.com/?p=41825) - [The Tribune — Cabinet approves 3% DA hike for 48.54 lakh employees, 68.71 lakh pensioners](https://www.tribuneindia.com/news/business/cabinet-approves-3-da-hike-for-48-54-lakh-central-government-employees-68-71-lakh-pensioners) - [Free Press Kashmir — Cabinet approves 3% DA hike (28 Oct 2026)](https://freepresskashmir.news/2026/10/28/cabinet-approves-3-da-hike-for-central-government-employees-and-pensioners/) - [Labour Bureau — Consumer Price Index for Industrial Workers](https://labourbureau.gov.in/) - [Department of Expenditure — Office memoranda on DA](https://doe.gov.in/)