Has the July 2026 DA hike been announced?

Not as of 11 October 2026. The CPI-IW formula points to 63%, but DA stays at 60% on payslips until the Cabinet approves it. Arrears will be paid from 1 July 2026 once the order is issued.

Why is DA 63% and not 64% when the formula gives 63.75%?

The DA rule drops the decimal part instead of rounding it. Any result from 63.00% to 63.99% gives 63%.

Do pensioners get the same increase?

Yes. Pensioners and family pensioners get Dearness Relief (DR) at the same rate and from the same date as DA for serving employees.

Yes. DA is part of salary and is fully taxable under both the old and the new tax regime. DR received by pensioners is taxable as pension income.

What is the 2.88 linking factor?

It converts the CPI-IW on the newer 2016=100 base into the older 2001=100 base used in the 7th CPC DA formula. Multiply the new index by 2.88 to get the old-base figure.

How dearness allowance (DA) is calculated

Updated 11 October 2026

Dearness allowance (DA) is worked out from a price index, the All-India Consumer Price Index for Industrial Workers (CPI-IW). The government takes the average of the index over 12 months, measures how far it is above 261.42, the price level on which 7th CPC pay was built, and that percentage, with the decimals dropped, becomes the new DA rate. Pensioners get the same rate as Dearness Relief (DR).

The DA formula under the 7th CPC

The 7th Central Pay Commission (CPC) kept the long-standing link between DA and CPI-IW, and every DA order since 2016 follows this formula:

DA % = (12-month average of CPI-IW on base 2001=100 - 261.42) ÷ 261.42 × 100

CPI-IW is a monthly index published by the Labour Bureau under the Ministry of Labour and Employment. It tracks retail prices of food, housing, fuel, clothing, transport, health, education and other items bought by industrial-worker families.
The 12-month average smooths out monthly swings. For DA due on 1 January, the 12 months ending in the previous December are used. For DA due on 1 July, the 12 months ending in June.
261.42 is the average index for the 12 months of 2015. 7th CPC pay already covered prices up to that level, which is why DA restarted at 0% on 1 January 2016.
Decimals are dropped, not rounded. A result of 63.75% gives 63% DA, not 64%.

The 2016 series and the 2.88 linking factor

The formula is written for the older CPI-IW series with base year 2001=100. From the index for September 2020, the Labour Bureau switched to a new series with base year 2016=100, which has an updated basket of goods and covers more centres. Numbers on the new base are much smaller, around 150 in 2026, while the formula expects numbers around 430.

To join the two series, the Labour Bureau published a linking factor of 2.88. Multiply a 2016-series index by 2.88 to get its 2001-series equivalent, and use that in the formula. Each month's converted figure is normally taken as a whole number. For example, the June 2026 index of 151.9 × 2.88 = 437.47, which is taken as 437.

Worked example: the July 2026 instalment

Here are the published indices for the first half of 2026 and their converted values:

Month	CPI-IW (2016=100)	× 2.88 (2001=100)
January 2026	148.6	428
February 2026	148.5	428
March 2026	149.1	429
April 2026	149.9	432
May 2026	150.8	434
June 2026	151.9	437

Worked example. The converted figures for July to December 2025 add up to 2,549, and those for January to June 2026 (table above) add up to 2,588. Twelve-month total = 2,549 + 2,588 = 5,137. Average = 5,137 ÷ 12 = 428.08. DA = (428.08 - 261.42) ÷ 261.42 × 100 = 166.66 ÷ 261.42 × 100 = 63.75%. Dropping the decimals gives 63%, three points above the current 60%. For a Level 6 employee on basic pay of ₹35,400, DA would go from ₹21,240 (60%) to ₹22,302 (63%), a rise of ₹1,062 a month.

Important: as of 11 October 2026 the Cabinet has not approved the July 2026 instalment. Payslips still show 60%, and 63% is only what the formula points to until the Department of Expenditure issues its order. When the order comes, arrears are paid from 1 July 2026. You can estimate yours with the DA arrears calculator.

When DA is announced and paid

DA is revised twice a year, with effect from 1 January and 1 July.
The Labour Bureau releases each month's index about a month later, so the June figure, the last one needed for the July instalment, is out by the end of July. The formula result is therefore known well before the official order.
The Union Cabinet approves the increase, and the Department of Expenditure (Ministry of Finance) issues an office memorandum. The January 2026 instalment, for example, was approved on 18 April 2026 and the order followed on 22 April 2026.
Arrears from the effective date are paid with the next salary after the order. Pensioners get DR at the same rate from the same date.

Recent DA rates

Effective from	DA rate
1 July 2023	46%
1 January 2024	50%
1 July 2024	53%
1 January 2025	55%
1 July 2025	58%
1 January 2026	60%
1 July 2026	63% expected, not yet approved

DA was held at 17% from January 2020 to June 2021 during the Covid freeze. It was raised to 31% from 1 July 2021, which built in the three frozen instalments, but no arrears were paid for the freeze period. The full list since 2016 is on the DA rates page.

What else moves with DA

DA is paid on basic pay only, and separately on transport allowance (TA is paid as base TA plus DA on it).
HRA rates are linked to DA. They went from 24%, 16% and 8% to 27%, 18% and 9% when DA crossed 25%, and to 30%, 20% and 10% from 1 January 2024 when DA reached 50%. See HRA city classes.
The gratuity ceiling was raised from ₹20 lakh to ₹25 lakh from 1 January 2024, also triggered by DA reaching 50%.
DA is not merged into basic pay when it crosses 50%. Unions have asked for a merger, but under current rules DA only goes back to zero when a new pay commission's pay scale takes effect. See the fitment factor guide.
DA is fully taxable as salary in both the old and new tax regimes.

State governments set DA for their own employees and often follow the Centre's rate after a gap. Private-sector variable DA (VDA) under minimum wage notifications uses different indices and is not covered here.