DA hike: Tax on salary component, 8th Pay Commission timeline

The entire DA amount is subject to income tax at the employee's applicable slab rate. Taxpayers must report it separately in their income tax returns, the tax rules state.

Following the central hike, the Indian Banks' Association announced revised DA and DR for workmen and officer employees for May, June and July 2026, the IBA said. The Indian Railways also announced a 2% hike for its personnel. Several state governments have since increased DA to close the gap with central government rates, the Mint report said.

Employees and pensioners had expected a second hike of 3-4% in July, based on the Labour Bureau's All India Consumer Price Index for Industrial Workers. July passed without an announcement. Based on past patterns -- a 3% hike in October 2025 and a pre-Diwali announcement in 2024 -- beneficiaries could see a