8th Pay Commission Update: The recommendations of the 8th Pay Commission for central government employees will be implemented from January 1, 2026. However, experts say the actual impact will occur in 2027-28 or 2028-29. The arrears will be paid in a lump sum and will be fully taxable.
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8th Pay Commission: Central government employees are increasingly curious about the 8th Pay Commission. The 7th Pay Commission’s term ended on December 31, 2025, and the 8th Pay Commission’s provisions are effective from January 1, 2026. This means a new round of salary increases is about to begin for central government employees.
The government has already indicated that pay commissions are implemented every ten years, and that practice will continue this year as well. The 8th Pay Commission was constituted with a deadline of early to mid-2025, and its Terms of Reference (ToR) notification was issued in November 2025. The commission has been given approximately 18 months to submit its report.
When will the 8th Pay Commission be implemented?
Although the commission’s recommendations will take effect from January 1, 2026, experts believe that actual implementation may be delayed. Madan Sabnavis, chief economist at Bank of Baroda, said the practical impact of the commission’s recommendations will be visible by the end of fiscal year 2027-28 or 2028-29. Meanwhile, according to Rohit Jain, managing partner at Singhania & Co., the new pay slabs are likely to be announced in late 2026 or early 2027.
How much arrears will the employees get?
The biggest question is how much arrears employees and pensioners will receive in the event of a delay. According to Rohit Jain, if the 8th Pay Commission is implemented in May 2027, employees will receive arrears for the period between January 2026 and April 2027. This will be paid in a lump sum.
Madan Sabnavis stated that the government will make special provisions for arrears payments in its budget. Arrears will be calculated based on the difference in salary increases. For example, if your salary increases from ₹ 45,000 to ₹ 50,000, the difference is ₹ 5,000. If the delay is 15 months, the employee will receive a total arrears of ₹ 5,000 × 15 = ₹ 75,000.
Will I have to pay tax on this?
As for taxes, yes, these arrears will be fully taxable. According to Sabnavis, many employees may fall into the 30% income tax slab after the 8th Pay Commission. Therefore, they will have to pay tax on their arrears at the same rate.
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