Quick answer: There is no 8th Pay Commission DA merger on the table. The government told the Lok Sabha on 1 December 2025 that "No proposal regarding merger of the existing Dearness Allowance with the Basic Pay is under consideration". DA is 63% from 1 July 2026. When the 8th CPC pay structure takes effect, the DA you get today is expected to be absorbed into the new basic pay and restart at zero, as it did in 2016. A 50% merger and 20% interim relief remain union demands, not decisions.
Every time DA crosses 50%, the question of an 8th Pay Commission DA merger returns: will DA be folded into basic pay? This guide sets out what the government has said, what actually happens to DA when a pay commission is implemented, how HRA and Transport Allowance are linked to DA, where the interim relief demand stands, and what it all means for take-home pay.
Will DA be merged with basic pay?
Not at present. Two different things are often mixed up:
| DA merger (the demand) | DA absorption at revision (what normally happens) | |
|---|---|---|
| What it means | Moving part of DA into basic pay now, before the 8th CPC is implemented | Counting the DA you already get when new basic pay is fixed under the 8th CPC |
| Status | Demanded by unions; government says no proposal under consideration | How the 7th CPC worked in 2016; expected again, but not yet decided |
| Effect | Higher basic now, so HRA, TA, NPS and pension calculations rise immediately | Higher basic from the effective date; DA restarts at zero |
There is a precedent for a merger: during the 5th Pay Commission period, when DA passed 50%, half of it was merged into basic pay as "Dearness Pay". The 6th and 7th CPC did not repeat this. Any merger now would need a fresh government decision.
8th Pay Commission DA merger: what the government told Parliament
- 1 December 2025: Lok Sabha, Question 212"No proposal regarding merger of the existing Dearness Allowance with the Basic Pay is under consideration with the Government at present." DA continues to be revised twice a year on the basis of the All India Consumer Price Index for Industrial Workers (AICPI-IW) (text of the reply).
- April 2026: CabinetDA raised from 58% to 60% from 1 January 2026 (Swarajya).
- 28 October 2026: CabinetDA and DR raised from 60% to 63% from 1 July 2026, under the 7th CPC formula (The Week).
- Now: 2 November 2026No merger order. DA continues under the 7th CPC formula until the 8th CPC structure is implemented.
DA has risen 13 points since it crossed 50%
Dearness Allowance, % of basic pay (7th CPC)
Sources: Cabinet decisions as reported by Adda247 (Jan 2024), Outlook Money (2025) and The Week (2026).
What happens to DA at a pay revision
Will DA become zero after the 8th Pay Commission? On past practice, yes, but not because it is taken away. It is folded into the new basic pay. The 7th CPC shows how:
- 1. DA counted inDA stood at 125% on 1 January 2016, so old basic plus DA was 2.25 times old basic.
- 2. Real rise addedThe fitment factor of 2.57 is about 2.25 times 1.14: the DA already paid, plus a real increase of about 14%.
- 3. DA restartsDA under the new structure began again from zero and had reached 4% by July 2017.
In practice, the main 8th Pay Commission DA changes would be a one-time absorption and a fresh start from zero, not a loss of the DA already earned. That is also why any 8th CPC fitment factor has to be compared with today's DA. At 63% DA, old basic plus DA is 1.63 times basic, so a factor below 1.63 would cut pay, and the real rise starts only above it. Sources: 125% DA on 1 January 2016; 4% DA from July 2017.
Will DA and HRA continue under the 8th Pay Commission? Yes, both continue to exist. DA restarts on the new basic and rises every six months; HRA continues, though its rate depends on the DA level, as explained next.
HRA after the 8th Pay Commission
Under the 7th CPC, HRA is a percentage of basic pay that steps up as DA crosses set thresholds (DoE OM of 7 July 2017):
| DA level | X cities | Y cities | Z cities |
|---|---|---|---|
| Below 25% | 24% | 16% | 8% |
| 25% or more | 27% | 18% | 9% |
| 50% or more (since 1 January 2024) | 30% | 20% | 10% |
| Minimum HRA | ₹5,400 | ₹3,600 | ₹1,800 |
If the 8th CPC keeps the same design, DA restarting at zero would bring HRA back to the lowest band, 24/16/8%, but applied to a much higher basic pay. The percentage falls, the rupee amount usually rises. The 8th CPC may also recommend new HRA rates or thresholds, so these 8th Pay Commission HRA changes are not yet known.
Other limits linked to DA work the same way. When DA reached 50% in January 2024, the gratuity ceiling rose by 25% from ₹20 lakh to ₹25 lakh, along with several allowances.
Transport Allowance
Transport Allowance is paid as a fixed amount plus DA on it. The current rates, from 1 July 2017 (DoE OM of 7 July 2017):
| Pay level | Higher TPTA cities | Other places |
|---|---|---|
| 9 and above | ₹7,200 + DA | ₹3,600 + DA |
| 3 to 8 | ₹3,600 + DA | ₹1,800 + DA |
| 1 and 2 | ₹1,350 + DA | ₹900 + DA |
At the 7th CPC, the old rates were revised by building in the 125% DA then payable, with no further increase. A similar approach would carry today's DA on TA into the new rates.
8th Pay Commission interim relief demand
The Confederation of Central Government Employees and Workers has demanded a 50% DA/DR merger and 20% of pay and pension as interim relief from 1 January 2026, and served a strike notice on 23 January 2026 (StaffNews). The FNPO wrote to the 8th CPC Chairperson on 27 February 2026 asking for the 50% merger to be treated as interim relief (Upstox).
No government order grants interim relief or a DA merger, and the 8th CPC has not made any interim recommendation on either. The latest 8th Pay Commission DA merger updates point the same way: a viral claim that a 50% merger had been approved from 1 January 2026 was flagged as fake by the Commission's verified social media account, according to Karmactive.
Effect on take-home pay
This is an illustration, not an official figure. Level 7, basic ₹44,900, posted in an X city, fitment factor 1.86, new DA zero, HRA at 24% under the 7th CPC design, and Transport Allowance carried over with today's DA built in.
| Component | Today (DA 63%) | After revision (illustration) |
|---|---|---|
| Basic pay | ₹44,900 | ₹83,514 |
| DA | ₹28,287 | ₹0 |
| HRA | ₹13,470 (30%) | ₹20,043 (24%) |
| Transport Allowance | ₹5,868 (₹3,600 + 63%) | ₹5,868 |
| Gross monthly pay | ₹92,525 | ₹1,09,425 |
Gross pay rises by ₹16,900 (about 18%) in this example, more than the 14% rise in basic plus DA, because HRA is now worked out on the higher basic. Deductions linked to basic pay and DA, such as NPS contributions, rise too. To see your own figures, see the effect on take-home pay in the 8th Pay Commission salary calculator.
Related: 8th Pay Commission guide, implementation date and arrears, DA calculator and DA arrears calculator.
Want to check this month's DA or your July 2026 arrears? The free DA calculator and DA arrears calculator work out both at 63%. No app, no download, no login.
Frequently asked questions
Does DA automatically merge with basic pay when it crosses 50%?
No. There is no automatic rule. In the 7th CPC structure, DA crossing 50% triggers higher HRA rates and a 25% rise in the gratuity ceiling and some allowances, not a merger. A merger needs a separate government decision.
Will the July 2026 DA arrears be affected by the 8th Pay Commission?
No. The 63% DA from 1 July 2026 is paid under the current 7th CPC structure. If the 8th CPC is later made effective from 1 January 2026, the DA already paid for that period would be set off against the arrears worked out under the new structure, as happened in 2016.
Is DA paid on Transport Allowance?
Yes. Transport Allowance is paid at a fixed rate plus DA on that rate, so it rises with every DA revision.
Position as of 2 November 2026. Whether DA is merged, how it is reset and the HRA rates after revision will be decided only by the government on the 8th Pay Commission's report. The 8th Pay Commission DA merger remains a demand. Figures in the example are illustrations. General information, not legal or financial advice.