DA Hike 2026: 5% Increase Likely for Central Govt Employees

As preparations for the 8th Pay Commission continue, central government employees and pensioners may receive some immediate relief. As per estimates based on inflation data, a 5% hike in Dearness Allowance (DA) is expected from January 2026, even though the pay commission announcement is still pending.

DA revision is crucial as it helps offset rising living costs. With inflation remaining steady, expectations are strong that employees will see an increase soon.

Why This Update Matters

• DA directly increases monthly salary and pension
• Transport Allowance also rises automatically with DA
• Around 50.14 lakh employees and 69 lakh pensioners stand to benefit

Event / Category	Details / Dates
Allowance Type	Dearness Allowance (DA)
Expected DA Rate	63% (from current 58%)
Effective Month	January 2026
Data Basis	AICPI-IW (Dec 2025)
Data Release	First week of February 2026
Official Source	Ministry of Labour
Official Website	Available Here

How is DA Calculated?

The DA hike depends on the All-India Consumer Price Index for Industrial Workers (AICPI-IW). If the December 2025 index remains around 148.2, the DA calculation works out to nearly 63%.

In simple terms:

• Average AICPI-IW of last 12 months is considered
• Formula under the 7th Pay Commission is applied
• Difference from existing DA gives the hike percentage

This results in an estimated 5% increase over the current 58%.

Transport Allowance Also Set to Increase

Transport Allowance (TA) is linked with DA and will automatically rise if DA increases.

Key Points on Transport Allowance

• Cities are classified as X, Y, and Z
• X-category cities get the highest TA
• DA is added on top of fixed TA every month
• Only DA affects TA, not HRA or other allowances

Example:

• Current TA: ₹1,800
• DA @58%: ₹1,044 → Total TA: ₹2,844
• DA @63% (expected): ₹1,134 → New TA: ₹2,934

Employees at Level 14 and above who do not use official vehicles get ₹15,750 per month.
Differently-abled employees receive double the applicable TA.

What About HRA and Basic Pay?

• House Rent Allowance (HRA) changes only when basic pay is revised
• Basic salary revision happens after Pay Commission recommendations
• The 8th Pay Commission report is expected around July 2028

So, for now, DA and TA are the only components likely to increase.

Important Note for Employees

Editor’s Tip: Once AICPI-IW data is released, official DA orders usually follow within weeks. Keep salary slips and service details updated to avoid calculation errors when arrears are credited.

Frequently Asked Questions (FAQs)

Q1. Who will benefit from the DA hike in January 2026?

All central government employees and pensioners covered under the 7th Pay Commission will benefit.

Q2. Will arrears be paid if DA is approved later?

Yes, DA is paid retrospectively from January 2026, so arrears are usually credited.

Q3. Does DA hike mean salary revision under the 8th Pay Commission?

No. DA hike is separate. Basic salary revision will happen only after the 8th Pay Commission report, likely in 2028.