The much-awaited Dearness Allowance (DA) hike under the 7th Pay Commission for July 2025 has now been approved. The government has cleared a 3 per cent increase which raises DA from 55 per cent to 58 per cent according to several media reports.  This will be the last DA revision under the 7th Pay Commission as the 8th Pay Commission will come into effect from January 2026. The hike will benefit over 48 lakh central government employees and 66 lakh pensioners giving them some relief at a time when living costs are rising. What is Dearness Allowance (DA)? Dearness Allowance is extra money given to government employees and pensioners to help them manage the impact of inflation. Since the prices of daily essentials keep going up DA makes sure that salaries and pensions do not lose their value. The DA rate is calculated using the Consumer Price Index for Industrial Workers (CPI-IW) which measures changes in the cost of living. By linking DA to this index the government ensures that the increase is fair and based on actual price movements in the market. July 2025 DA Hike Officially Confirmed? The Labour Bureau recently released the CPI-IW data for June 2025 showing the index at 145.0 up by one point from May. Based on this the Dearness Allowance (DA) has been confirmed at 58 per cent up 3 per cent from the previous 55 per cent. Effective Date: July 1 2025 Cabinet Approval: Expected in September 2025 Payment Date: October 2025 Arrears: July August and September 2025 This means employees will get the revised DA in their October salary along with a one-time payment for the arrears of the past three months. Timeline for DA Implementation: July 1 2025: DA hike comes into effect September 2025: Cabinet approval and official notification expected October 2025: First salary with new DA credited October 2025: Lump sum arrears for July August and September also paid This schedule ensures that employees and pensioners receive their dues in time for the festive season. It is to be noted that any formal DA hike announcement will be made by the government during a Cabinet briefing.