DA Hike in July 2025: From July 2025, the dearness allowance (DA) of central employees is set to increase by 3%, which will increase the total DA from 55% to 58%. This confirmation is based on the data of the AICPI index from January to June 2025, whose final score is 58.18%.
DA Hike in July 2025: There is great news for crores of central employees and pensioners of the country, the dearness allowance (DA) data you all were waiting for has arrived and it has confirmed that your salary is going to get a bumper jump once again. The AICPI index from January to June 2025 has made it completely clear that from July 1, 2025, there will be a definite increase of 3% in your dearness allowance.
This means that your DA will increase from 55% to 58% directly. So how much money will increase in your pocket every month? How was this DA score decided? And when will the government announce it? Let’s leave the confusion and understand the whole math here.
How was it confirmed? Understand the whole game of AICPI index
The 7th Pay Commission has a scientific formula for deciding the dearness allowance of central employees, which depends on the data of AICPI (All-India Consumer Price Index). You can consider it as a ‘thermometer’ of inflation. The Labor Bureau releases these figures every month. For the DA to be received from July, the data from January to June is looked at.
The whole story from January to June 2025
| Month | AICPI Index | DA % Score |
| 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 | 145.0 | 58.18% |
As you can see in the table, in June 2025, the index jumped by 1 point and reached 145.0 points. On this basis, the total score of DA is 58.18%. The government does not consider the part after the decimal point, so it is certain that employees will get dearness allowance at the rate of 58% only.
How much will it affect your salary? (Understand through calculation)
Now let’s come to the most important question – how much money will this 3% increase bring in your pocket every month? Let’s understand this with an example.
Suppose, the current basic pay of an employee is ₹40,000 per month.
Existing DA (at the rate of 55%)
- 55% of ₹40,000 = ₹22,000 per month
New DA (at the rate of 58%)
- 58% of ₹40,000 = ₹23,200 per month
Direct increase in salary
- Monthly increase: ₹23,200 – ₹22,000 = ₹1,200 per month
- Annual increase: ₹1,200 x 12 = ₹14,400 per year
This is calculated only on the basic pay. As your basic pay increases, this amount will also increase in the same proportion.
The money will be available from July, but why is it announced in October?
This is a normal process. Even though the dearness allowance will be implemented from July 1, 2025, the government takes some time to announce it. Usually it is announced in late September or October, when it gets approval from the cabinet.
Data Compilation: The Labor Bureau releases the AICPI data for the month of June at the end of July.
Preparation of Finance Ministry: On the basis of these figures, the Department of Expenditure of the Finance Ministry prepares a proposal to increase DA.
Cabinet approval: The proposal is placed before the Union Cabinet for final approval.
Official announcement: It is officially announced only after the cabinet approves it. The notification is released.
This entire process usually takes 2-3 months. Therefore, it is expected that the government will announce it in late September or early October. Whenever the announcement is made, employees will get the entire arrears from July to the month of announcement together.
What will be the impact of this increase on the 8th Pay Commission?
This DA hike is also very important from the perspective of the 8th Pay Commission. The 8th Pay Commission is expected to be implemented from January 1, 2026.
Base of DA
This increased rate of DA will become a major part of your total salary.
Next Hike
It is estimated that there will be another increase in dearness allowance by January 2026 and it is estimated that it can reach around 61%.
DA Merger Rules
There is a rule to merge the entire DA into the basic pay when the 8th Pay Commission is implemented. However, the final decision will be taken by the government. The calculation of DA will start again from zero. But, your increased DA will play an important role in the calculation of your new basic pay, which will lead to a big jump in your salary.
Conclusion
The data of AICPI index has made it clear that the next dearness allowance for central employees will be 58% with an increase of 3%. This will not only bring a good increase in their current salary, but will also lay a strong foundation for the 8th Pay Commission. Now we just have to wait for the official announcement of the government, after which the smile will return on the faces of crores of employees and pensioners once again.
Some important questions related to the article (FAQs)
1. How much will DA increase from July 2025?
Dearness allowance will increase by 3%.
2. What will be the total amount of new dearness allowance?
This will increase from 55% to a total of 58%.
3. When can the government make its official announcement?
The announcement is expected by late September or October 2025.
4. Will this increased DA be included in the 8th Pay Commission?
Yes, this will form the basis for calculation of new basic pay under the 8th Pay Commission.
5. On what basis has this increase been decided?
This has been decided on the basis of official data of AICPI index from January to June 2025.
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