Circular Number:
No.1/4(i)/2025-Ε.ΙΙ(Β)
Published By:
Ministry of Finance, Department of Expenditure
Date:
October 06, 2025
English: The Central Government has announced an increase in the Dearness Allowance (DA) for its employees, raising the rate from 55% to 58% effective from July 1, 2025.
Hindi: केंद्र सरकार ने अपने कर्मचारियों के लिए महंगाई भत्ते (DA) में वृद्धि की घोषणा की है, जिसे 1 जुलाई, 2025 से 55% से बढ़ाकर 58% कर दिया गया है।
Official Subject
Revision of rates of Dearness Allowance to Central Government employees- effective from 01.07.2025.
Important Extracts from the Circular
"the President is pleased to decide that the rates of Dearness Allowance payable to Central Government employees, shall be enhanced from 55% to 58% of the Basic Pay with effect from 1st July, 2025."
"The payment on account of Dearness Allowance involving fractions of 50 paise and above may be rounded off to the next higher rupee and the fractions of less than 50 paise may be ignored."
Simplified Explanation
- Rate Hike: The Dearness Allowance, which helps offset the impact of inflation, has been increased by 3%, moving from the previous 55% to a new rate of 58%.
- Effective Date: This change is applied retrospectively starting from July 1, 2025.
- Calculation Basis: The allowance is calculated based on the "Basic Pay" as defined by the 7th CPC recommendations, excluding other forms of special pay.
Who Is Affected
- Central Government civilian employees, including those paid from the Defence Services Estimates.
- Personnel in the Indian Audit and Accounts Department.
- Armed Forces personnel and Railway employees (though they will receive separate specific orders).
Practical Implications
- Financial Increase: Employees will see a 3% increase in their monthly Dearness Allowance relative to their basic pay.
- Arrears: Since the order was issued in October but is effective from July, employees may be entitled to arrears for the intervening months.
- Rounding Rules: Payroll departments must round off any DA fractions to the nearest rupee (upward for 50 paise or more).
Frequently Asked Questions (FAQs)
Q1. What is the new DA rate?
Answer: The new rate is 58% of the Basic Pay.
Q2. From when is this increase applicable?
Answer: It is effective from July 1, 2025.
Q3. Does "Basic Pay" include special allowances?
Answer: No, for DA calculation, Basic Pay refers only to the pay drawn in the prescribed Level of the Pay Matrix and does not include special pay.
Q4. Will Railway employees be covered by this specific order?
Answer: No, the Ministry of Railways will issue separate orders for Railway employees.
Q5. Is the DA considered part of the "Pay" for service rules?
Answer: No, it remains a distinct element of remuneration and is not treated as pay under FR 9(21).
This is an unofficial, independent informational summary created for educational purposes only.
For authoritative and legally binding information, please refer to the original circular published by the concerned authority.
