The Centre has raised dearness allowance (DA) for central government employees from 58% to 60% of basic pay, with the increase taking effect retrospectively from "January 1, 2026", a notification issued on Wednesday confirmed.
The move means eligible employees will receive arrears for the months already elapsed this year, offering a salary boost in upcoming payouts.
The decision was announced through an Office Memorandum released on Wednesday, issued by the Ministry of Finance, Department of Expenditure.
The notification states that “the President is pleased to decide that the rates of Dearness Allowance payable to Central Government employees, shall be enhanced from 58% to 60% of the Basic Pay with effect from 1st January, 2026.”
This retrospective clause is the key takeaway, as it confirms that employees will not lose out because of the delay in the formal order.
ALSO READ: 8th Pay Commission Arrears: Rs 10 Lakh-Plus Payout Possible For Level 1 Employees
Why Arrears Are Payable
DA is revised twice every year — usually from January 1 and July 1 — to offset the impact of inflation on salaries. The first revision of the year is generally announced around March, but this year's notification came later than expected, leading to speculation over pending arrears.
Since the revised rate applies from January 1, employees are expected to receive the difference for previous months as arrears along with upcoming salary payments.
How DA Will Be Calculated
The memorandum also clarifies what qualifies as basic pay. It says basic pay means the pay drawn in the prescribed level of the pay matrix under the 7th Central Pay Commission, and “does not include any other type of pay like special pay etc.”
This means the revised DA will be calculated only on basic pay, not on allowances or other components.
The government further said DA will “continue to be a distinct element of remuneration and will not be treated as pay” under Fundamental Rules. In practical terms, it remains a separate salary component rather than being merged with basic pay.
For lakhs of employees and pensioners, the latest order brings clarity on both the revised rate and arrears, with the higher DA now set to reflect in salary slips and pension payments in the coming cycle.
ALSO READ: 8th Pay Commission: Rs 69,000 Minimum Pay, Fitment Factor Of 3.833 — Key NC-JCM Staff Side Proposals
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
