Good news for all central government employees and pensioners—3% increase in Dearness Allowance/Relief (DA/DR) from July 1, 2025!
Dearness allowance and dearness relief have been revised upwards by 3% from July 1, 2025, as per a Government of India notification. Presently, DA was 55%, but with the new increase, it will become 58%—a relief of this nature helps in balancing the monthly budgets amidst ever-increasing inflation.
Why is this increase considered significant?
DA/DR is an important tool to counter inflation. An extra 3% in DA/DR keeps your income in real terms to counter the inflation of prices of basic essentials—grocery items, fuel, and medicines.
Who will benefit?
- Around 4.8 million central employees.
- Around 6.6 million pensioners.
- Both will receive the 3% additional DA/DR equally.
Impact on Salary/Pension: Explained Simply
- If your basic pay is ₹18,000, an increase of 3% means an additional ₹540/month.
- Increase will be higher, proportionately, for those having higher basic pay.
- An additional 3% will be given in DR to the pensioner, thereby increasing their monthly pension.
Effective Date and Payment Schedule
Jan–Jun 2025: DA 55% (as before).
Jul–Dec 2025: DA 58% (new rate, w.e.f. Jul 1, 2025).
Arrears Payment:
- Arrears for July, August, and September 2025 will be paid in November 2025.
- From October 2025, the revised DA/DR will be merged with regular salary/pension.
This means lump-sum payment of arrears and ongoing increase every month from then on—a double benefit.
Last hike before the 8th Pay Commission
This is the last DA/DR increase to be granted in favour of the employees of 7th Pay Commission (7CPM). A major overhaul of the structure of salary, pension, and allowance is anticipated in 2026 with the 8th Pay Commission. In a way, this 3% increase is the last kick-off before the next big change.
What will change on your payslip/pension slip?
- The DA/DR percentage will be changed from 55% to 58% (based on the basic).
- The new rate will reflect in the salary/pension from October 2025.
- The arrears for three months (July–September) shall be separately credited in November 2025.
- Other allowances, such as HRA/TA, will be impacted only if their calculation rules link them to DA (refer departmental rules).
Frequently Asked Questions
1) What is the new DA rate and from when?
Answer: 58%, effective July 01, 2025.
2) How many people will be benefitted?
Answer: Roughly 4.8 million employees and 6.6 million pensioners.
3) When shall the arrears be received?
Answer: Arrears for July-September 2025 in November 2025.
4) Is this the last increase under the 7th CPC?
Answer: Yes, post this, the recommendations of the 8th Pay Commission are expected to be implemented in 2026.
5) To what will my additional DA amount to?
Answer: Basic × 3%. Example: Basic ₹18,000 → Additional ₹540/month.
Summary
A 3% hike in DA/DR gives actual monetary relief against inflationary pressures—58% from July 2025, arrears in Nov 2025, and higher DA/DR every month from then on. This will serve as a fillip to stabilize the household budget before the 8th Pay Commission
