8th Pay Commission: Key Demands for DA Changes to Benefit Employees and Pensioners
Mumbai, October 29: The 8th Pay Commission, formed on November 3, 2025, is currently reviewing three significant demands regarding the Dearness Allowance (DA) for central government employees and pensioners. These demands include increasing DA every three months, merging DA with the basic salary once it reaches 25%, and exempting DA from income tax. If approved, these changes could have a substantial impact on the salaries, pensions, and tax liabilities of employees and pensioners. However, these proposals are still pending government approval and should be viewed as demands rather than implemented rules.
The commission, chaired by Justice Ranjana Prakash Desai, has 18 months from its formation date to submit its final report to the central government. It is actively engaging with employee organizations and unions across various states to gather feedback on these longstanding demands related to DA and Dearness Relief (DR).
The first major demand is to revise DA and DR every three months instead of the current biannual adjustments. Employee organizations argue that with rising inflation, more frequent adjustments are necessary to provide timely relief. The Bharat Pensioners Samaj (BPS) has specifically requested that changes be based on the average inflation data over three months.
The second demand involves merging DA with the basic salary once it reaches 25%. The Federation of National Postal Organisations (FNPO) has proposed that this merger should also apply to the basic pension when DR exceeds 25%. Additionally, they have called for precise calculations in determining DA rather than rounding figures.
The third demand seeks to exempt DA from income tax, with the FNPO arguing that since DA is intended to offset inflation, it should not be taxed. They are also advocating for tax exemptions on House Rent Allowance (HRA) and Transport Allowance.
If these demands are accepted, it could lead to a reduction in tax liabilities for eligible employees, thereby increasing their take-home salaries. However, no new regulations regarding tax exemptions for DA have been implemented yet, so employees should continue to plan their taxes according to existing rules.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.