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Millions Get Dearness Allowance Hike!
26 May
Summary
- Central government employees and pensioners now receive 60% Dearness Allowance.
- Indian Railways and IBA announced their own DA increases recently.
- This DA hike impacts over 11.5 million central government workers and retirees.
Effective January 1, 2026, the Centre has raised the Dearness Allowance (DA) to 60% for central government employees and pensioners, a move aligned with the 7th pay commission. This increase boosts the DA on basic pay from 58% to 60%, as confirmed by the Union Finance Ministry. This significant adjustment directly benefits around 50 lakh central government employees and approximately 65 lakh retired central government pensioners, including defense retirees.
Subsequent to the central government's decision, other major entities have implemented their own DA revisions. On May 2, 2026, the Indian Banks' Association (IBA) adjusted DA for its staff, affecting salaries for May, June, and July 2026. Shortly after, on May 13, 2026, Indian Railways announced a 2% DA hike for its vast workforce and pensioners. Dearness Allowance is a key component of an employee's total compensation and is taxable income.
The amount of DA can vary for each employee, influenced by their work location classification as urban, rural, or semi-urban, due to its connection to the cost of living.
