dearness allowance

The Modi government is reportedly set to raise dearness allowance for central government employees from 50 to 54 percent, according to reports circulating ahead of the July 2026 revision. The hike, if confirmed, would raise the basic salary payouts of lakhs of employees and pensioners. Official confirmation is still awaited, and no formal announcement has been made yet.

Livemint explains how dearness allowance fits into an employee's annual cost-to-company and how it is taxed. DA, paid by the government and some employers to offset inflation, is treated as part of salary for tax purposes and is fully taxable. The piece clarifies its impact on CTC structure and taxation.

Talk is growing that the central government will announce a new dearness allowance for its employees effective from July 2026, with reports suggesting arrears for three months will also be paid. Central government employees and pensioners have been waiting for the revision, and news coverage of the expected announcement has picked up attention across India.