Will DA Hike Stop Before 8th Pay Commission Implementation? Know The Truth

8th Pay Commission: The year 2025 has proven to be a pivotal year for Central Government employees. The final Dearness Allowance (DA) hike of the year has already been effected, pushing the DA rate to 58%, effective from July 1, 2025. Concurrently, the government has clarified the Terms of Reference for the 8th Pay Commission and has directed the commission to submit its report within 18 months. However, amidst these developments, a significant question is looming in the minds of employees: Will allowances like DA, HRA, and TA stop increasing after December 31, 2025? Or will they remain frozen until the 8th Pay Commission is implemented? Today, we delve into the truth based on expert opinions.

Will the DA Calculation Method Change?

There is a growing apprehension that since the process for the new Pay Commission has begun, the regular DA hikes might be halted. However, CA Chandni Anandan, a tax expert from ClearTax, has provided crucial clarity on this matter. According to her, the calculation of Dearness Allowance as a percentage of the basic pay will continue uninterrupted until the 8th Pay Commission is fully implemented.

The current method, where DA is calculated as a percentage of the Basic Salary, remains in force. As per the rules, this allowance is revised twice a year—in January and July—based on inflation and the All India Consumer Price Index (AICPI). This implies that even during the interim period before the commission’s report is submitted or implemented, employees can expect their regular DA hikes based on economic indicators.

8th Pay Commission and the New Salary Structure

Once the 8th Pay Commission is implemented, the salary structure of government employees will undergo a radical transformation. Experts suggest that at the time of implementation, the existing Dearness Allowance will be merged with the Basic Pay. This consolidation will result in the formation of a new and enhanced Basic Salary structure.

In simple terms, while DA is currently received as a separate allowance, it will become an integral part of the basic pay once the 8th Pay Commission comes into effect. However, until that significant transition occurs, the percentage of DA will continue to rise according to the existing norms.

Below is a summary table of the current status and expected changes:

Therefore, there is no need for panic. The process of allowance revisions based on government directives and economic indices is expected to continue smoothly.