New Delhi, Oct. 29 -- The Union Cabinet approved a 3-percentage-point increase in Dearness Allowance (DA) on 28 October, raising it from 60% to 63% of basic pay. The arrears will be paid to central government employees and pensioners from 1 July 2026.

Employees can also use the additional funds to boost their savings and improve their overall financial well-being.

The amount added to the monthly salary will vary depending on an employee's basic pay and current official rank. Employees can consider directing the additional funds towards savings, investments or an emergency fund.

For employees under the 7th Pay Commission, the revised DA rate translates into different increases depending on their pay level. An employee at Level 3, with a...