DA Merger or DA Reset: What Happens to Dearness Allowance When the 8th Pay Commission Starts
DA is 63% from 1 July 2026. What the Government has said about merging it, what happened in 2016 when DA restarted at zero, and why it decides your real raise.
6 min read · Published 22 October 2026 · Updated
Short answer
DA is paid on top of basic pay, so what happens to it when pay is revised decides how large your real rise is. In 2016 it restarted at zero. For the 8th Pay Commission nothing is decided, and the Government has said there is no merger proposal under consideration.
Last checked · 4 key figures from the fact register
Key facts
| Fact | Value | Source | Date checked |
|---|---|---|---|
| Dearness Allowance now | 63% of basic pay from 1 July 2026 Official source | PIB, 28 Oct 2026: Cabinet approves Dearness Allowance to Central Government employees and Dearness Relief to Pensioners (w.e.f. 01.07.2026) (opens in a new tab) | |
| DA from 1 July 2026 | 63% from 1 July 2026 Official source | PIB, 28 Oct 2026: Cabinet approves Dearness Allowance to Central Government employees and Dearness Relief to Pensioners (w.e.f. 01.07.2026) (opens in a new tab) | |
| Merging DA into basic pay | No proposal under consideration (Lok Sabha, 1 Dec 2025) Official order, read on a mirror | StaffNews: reply by Govt in Lok Sabha on 01.12.2025 (text of Unstarred Question 212) (opens in a new tab) | |
| DA after the 7th CPC | Restarted at 0% from 1 Jan 2016; 2% from 1 Jul 2016 Official order, read on a mirror | Department of Expenditure OM on DA from 1.7.2016 (copy hosted by ICAR) (opens in a new tab) |
Last verified 10 November 2026.
Where DA stands today
DA rose from 60% to 63% of basic pay with effect from 1 July 2026. The Cabinet approved it on 28 October 2026 and the Department of Expenditure order is dated 29 October 2026. The PIB release says the increase follows the accepted formula based on the recommendations of the 7th CPC.
The next instalment is due from 1 January 2027 and has not been announced.
Orders have often come months after the effective date. For the January 2026 instalment the Cabinet approved on 18 April 2026, about three and a half months late.
What the Government has said about merging DA
On 1 December 2025 the Minister of State for Finance told the Lok Sabha that no proposal regarding merger of the existing Dearness Allowance with the Basic Pay is under consideration. That is a statement about the Government's own position at that date. The Commission is independent in how it designs the pay structure and may recommend something different, and the Government may then accept or reject it.
What "merge" and "reset" mean
- Merger: the existing DA is added to basic pay, usually through the fitment factor, and DA on the new pay starts again from a low number.
- Reset: DA on the new pay restarts at zero.
In 2016 the two happened together.
What happened in 2016
A Department of Expenditure order of 4 November 2016 says the revised pay structure effective 1 January 2016 "includes the Dearness Allowance of 125%" of the old structure, so DA in the revised structure "shall be zero from 01.01.2016". DA of 2% of basic pay was admissible from 1 July 2016. The order also kept allowances at existing rates until a final decision on allowances.
Why it decides your real raise
If DA restarts at zero, the fitment factor must first absorb the old DA before it raises pay. At 63% DA a factor of 1.63 leaves basic plus DA unchanged.
| DA today | Factor that leaves basic plus DA unchanged | Factor for a 14.2% rise |
|---|---|---|
| 60% (to June 2026) | 1.60 | 1.83 |
| 63% (today) | 1.63 | 1.86 |
| 66% | 1.66 | 1.90 |
| 70% | 1.70 | 1.94 |
The 14.2% is the rise the 7th CPC's factor of 2.57 gave against the old pay plus 125% DA (2.57 ÷ 2.25). The table is arithmetic, not a forecast. If DA does not restart at zero, none of this applies and the same factor gives a bigger rise.
Try it in the fitment factor calculator.
What to do now
- Check your payslip DA rate against the official order, not a news headline.
- Do not plan around any January 2027 figure until an order is issued.
- Keep a note of each DA order date so you can check arrears. Our DA arrears calculator handles ordinary DA delays.
- Treat any "DA merged from 1 January 2026" claim as false unless a Department of Expenditure order exists.
Related
Official sources
- PIB: DA and DR from 1 January 2026
- Department of Expenditure OM on DA from 1 July 2016
- 8th Central Pay Commission website
FAQ
Will DA be merged with basic pay in the 8th Pay Commission?
The Government told the Lok Sabha on 1 December 2025 that no proposal to merge the existing DA with basic pay is under consideration. The 8th CPC's own recommendations are not yet known.
Will DA become zero after the 8th Pay Commission?
Not decided. In 2016 it did, because the old 125% DA was already included in the new pay. A 2016 order says DA in the revised structure was zero from 1 January 2016 and 2% of basic pay from 1 July 2016.
What is the current DA?
63% of basic pay from 1 July 2026, up from 60%. The Cabinet approved it on 28 October 2026 and the Department of Expenditure order is dated 29 October 2026.
What will DA be from January 2027?
Not decided. DA changes only when the Cabinet approves it and the Department of Expenditure issues an order, usually months after the date it applies from. Any figure before then is an estimate.
Does DA keep rising until the 8th Pay Commission is implemented?
Yes, in the normal course. DA is revised twice a year, from 1 January and 1 July, until a new pay structure replaces it.
Written by
PerkNavigate Editorial Team
Facts checked against official orders on 22 October 2026.
Every guide is checked against official sources. How we verify perks.
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