7th Pay Commission: Mega-Salary Hike with increase in DA

It’s raining money!! The 7th Pay Commission has revised and it’s time for celebration for the Central Government employees and pensioners.  Call it ‘Merry March’ because with the latest raise, the Central Cabinet will grant a 4% hike in Dearness Allowance ( DA) to all the Central government employees.

Central Government employees will now receive a 4% hike in Dearness Allowance ( DA). The pensioners’s Dearness Relief ( DR) will be increased from 4% to 50% to beat the cost inflation.

Not just the DA, there is also hike in the Travel Allowance ( TA), House Rent Allowance( HEA) and Child Education Allowance ( CEA), along with other significant allowances. Here is the complete detail about what is in store for the Central Government employees and pensioners. So, without any ado, let’s begin! 

7th Pay Commission Allowances Hike: What has changed? 

The government increases the DA for its employees two times a year; in January and July. As per experts, the new DA will be implemented from July onwards. 

On March 7 2024, the Ministry of Finance released a government memorandum that the government will bear the total cost of Rs 12862.72 cr annually as the impact of DA and DR hike. Well, this will be benefiting about 49.18 lacs Central govt employees and pensioners. 

Here’s the list of increased allowances: 

• Dearness Allowance( DA) 
• House Rent Allowance (HRA)
• Children’s Education Allowance (CAA)
• Childcare Special Allowance (CSA)
• Hostel Subsidy (HS) 
• TA on Transfer (Transportation of Personal Effects)
• Gratuity
• Dress Allowance 
• Mileage Allowance for own transport
• Daily Allowance

DA hike for Other Govt Employees

Applicable from 1st January 2024, Dearness Allowance( DA) will be increased from 46% to 50% for all the Central Government Employees. 

This increase in the DA will also be applicable to other government employees like Defence Civilians, Railways employees etc. However, the Ministry of Finance is in process of issuing a separate order for the same. 

Payment of Arrears 

The memorandum also dictates that no arrears will be paid in regard to DA hike before the salary of March 2024 is paid. 

Central Government Employees Group Insurance Scheme ( CGEGIS) 

The new 7th Pay commission revision also highlighted slight change in the monthly deduction under the CGEGIS scheme. With an increase in the amount of monthly deduction, the insurance amount has also been increased, which is worth appreciating. 

With all these revised allowances, the government has certainly kept its promise of ‘Acche din aayenge‘. Well, before you spend all the extra credited bucks, don’t forget to check out the 6 new income tax rules so that you pay the right tax well-in-time!

Good day!