The Government of India approved a Dearness Allowance revision to 60 percent of basic pay for central government employees effective January 1, 2026. This 4-point increase from 56 percent was announced in the Union Cabinet meeting.
What Is Dearness Allowance?
Dearness Allowance is a cost of living adjustment paid to central government employees. It is calculated as a percentage of basic pay under the 7th Central Pay Commission pay matrix. DA is revised twice a year — in January and July — based on the All India Consumer Price Index.
How the 60 Percent DA Affects Salary
For a Level 7 employee with basic pay of Rs 44,900, the monthly DA at 60 percent is Rs 26,940. At 56 percent it was Rs 25,144. The increase is Rs 1,796 per month or Rs 21,552 per year before tax.
HRA and transport allowance are also linked to DA, so the total benefit is higher than the DA increase alone.
Impact on Income Tax
Higher DA increases your gross salary which may affect your tax liability. Under the new income tax regime, incomes up to Rs 7 lakh annually pay zero tax after the rebate. The Income Tax Calculator can show your exact liability under both regimes.
Use the free Salary Calculator to calculate your revised salary with 60 percent DA applied.
Frequently Asked Questions
When does 60 percent DA take effect? January 1, 2026.
Will there be arrears? If the announcement was delayed, arrears from January 2026 may be paid. Confirm with your department.
Does DA affect HRA? Yes. HRA is 27 percent of basic for X cities and 18 percent for Y cities. Some HRA thresholds change when DA crosses certain milestones.
What about state government employees? Most state governments follow the central government DA pattern but timings may differ.