New Delhi, Nov. 2 -- The Centre's latest 3 percentage point increase in dearness allowance (DA) will raise the salary-linked retirement benefits of central government employees, including gratuity. However, the actual increase in gratuity will depend on an employee's last-drawn basic pay, qualifying years of service and the applicable maximum payout limit.

The Union Cabinet on 28 October approved a DA increase from 60% to 63% of basic pay, effective 1 July 2026. The increase will benefit around 48.54 lakh central government employees and 68.71 lakh pensioners. The revised DA rate is intended to compensate employees for the impact of inflation.

Since DA is included in the emoluments used to calculate retirement gratuity, a higher DA can ...