DA Hike: The month of August can bring double good news for central employees. DA is set to increase by 3% to 58%, which will lead to a jump in salary. Know how this increase will bring a big benefit for you in the 8th Pay Commission. Understand the complete calculation here.
DA Hike: The month of August is going to be no less than a festival for more than one crore central employees and pensioners of the country. This month they can get not one but two big updates. First, the new figure of Dearness Allowance (DA) to be implemented from July 2025 will come and it will be confirmed how much it will increase. And second, this increased DA will make your 8th Pay Commission benefits even bigger.
Yes, this DA hike will not only increase your current salary, but it will also strengthen the foundation of your future salary. After the AICPI index figures for the month of June come, it will be almost clear that another tremendous jump is going to come in the salary of the employees.
So let’s understand the whole mathematics of this ‘double lottery’ today. We will know how much DA will increase, what will be its effect on your salary, and how it will prove to be a ‘game-changer’ for you in the 8th Pay Commission.
How much will dearness allowance increase?
The dearness allowance of central employees taking salary under the 7th Pay Commission is revised every 6 months. Its basis is the data of AICPI (All India Consumer Price Index).
Current DA: Employees are getting 55% DA from January 2025.
Data so far: The data of AICPI index from January to May 2025 has come and they are clearly indicating that a 3% increase in DA is certain.
6-month journey of AICPI index
| Month | The index figure | Dearness Allowance |
| Jan 2025 | 143.2 | 56.39% |
| Feb 2025 | 142.8 | 56.72% |
| March 2025 | 143.0 | 57.09% |
| April 2025 | 143.5 | 57.47% |
| May 2025 | 144.0 | 57.85% |
| June 2025 | (data yet to come) | 58% (estimated) |
Final figure: The AICPI index number for June will come at the end of July, but according to the trend so far, it is almost certain that the total DA meter will stop at 58%.
How much will it affect your salary? (Calculation)
An increase of 3% DA means that there will be another increase in your salary. Let us understand this on the basis of minimum and maximum basic salary.
Calculation based on minimum basic salary (₹18,000)
| Description | Amount (per month) |
| Current Basic Salary | ₹18,000 |
| Dearness Allowance till now (55%) | ₹9,900 |
| New Dearness Allowance (58%) | ₹10,440 |
| Monthly hike | + ₹540 |
| Annual increase | + ₹6,480 |
Calculation based on maximum basic salary (₹56,900)
| Description | Amount (per month) |
| Current Basic Salary | ₹56,900 |
| Dearness Allowance till now (55%) | ₹31,295 |
| New Dearness Allowance (58%) | ₹33,002 |
| Monthly hike | + ₹1,707 |
| Annual increase | + ₹20,484 |
(Note: This is just the calculation of basic pay and DA. The total salary will be even higher if other allowances are added.)
Biggest news: How will you get the benefit of 8th Pay Commission?
This figure of 58% is very important not only for your current salary but also for your future.
DA Merger Rules
In every new pay commission, all dearness allowance (DA) till the date of implementation is merged into the basic salary of the employee.
How will this work?
The 8th Pay Commission is to be implemented from 1 January 2026. Whatever the DA figure will be till that time (it is likely that it may even cross 60%), it will be added to your existing basic salary.
Big advantage
The higher the DA figure, the higher will be your merged ‘revised basic salary’. And the fitment factor of the 8th Pay Commission will be applied on this revised basic salary.
Example
If your basic salary is ₹18,000 and DA is 60%, then your revised basic salary will be ₹28,800 (18000 + 10800). Now the fitment factor will be applied on this ₹28,800, which will result in a huge jump in your new basic salary. Therefore, this 3% increase matters a lot.
When will it be announced and when will we get the money?
Although this increase will be effective from July 1, 2025, the government usually makes its formal announcement in September or October. After the announcement, the government gives the entire arrears to the employees from July to the month of announcement together.
Conclusion
The month of August is bringing double good news for central employees. The 3% DA hike will not only increase their current salary, but it will also lay a strong foundation for the bumper salary hike in the 8th Pay Commission. This rising meter of DA is ensuring that when the new pay commission comes into effect in 2026, it will prove to be a historic gift for the employees.
Frequently Asked Questions (FAQs)
Q1: How much increase is expected in DA from July 2025?
A: As per the AICPI index data, a 3% hike is almost certain, which will take the DA to 58%.
Q2: When can this increase be announced?
A: The government usually makes a formal announcement in September or October.
Q3: Will employees get arrears?
A: Yes, once the announcement is made, the entire arrears will be paid together from July 1, 2025.
Q4: How will the increased DA benefit in the 8th Pay Commission?
A: In the 8th Pay Commission, this increased DA will be merged into your basic salary, which will make your new basic salary even higher.
Q5: On what basis is DA calculated?
A: DA is calculated every 6 months based on the data of AICPI (All India Consumer Price Index).
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