Dearness Allowance (DA) Calculation for PSU Employees – Q4 2025–26 (January 2026 to March 2026)

Dearness Allowance (DA) Calculation for PSU Employees – Q4 2025–26 (January 2026 to March 2026)

As we know, Dearness Allowance (DA) is paid as a fixed percentage of the basic salary. For instance, if an employee’s basic salary is ₹50,000 per month and the DA rate is 30%, then the DA payable will be ₹15,000 per month. This amount is paid in addition to the basic salary and other allowances such as House Rent Allowance (HRA).

The Ministry of Labour and Employment publishes the Consumer Price Index (CPI), which is used as the benchmark for determining the applicable Dearness Allowance (DA) rate. The Ministry has released the CPI-IW figures for September 2025, October 2025, and November 2025 (copy of the circular attached).

Based on the CPI-IW indices published by the Ministry of Labour and Employment, the Dearness Allowance (DA) for the 4^th quarter of the financial year 2025–26 (i.e., January 2026 to March 2026) has been computed at 53.40%, as against 51.80% for the 3^rd quarter of 2025–26, reflecting an increase of 1.60%.

DA (Dearness Allowance) for recent quarters:

The relevant CPI and DA% can be shown with the help of below diagram:

The methodology for calculation of DA for Q4 2025-26 is explained below:

For the purpose of Dearness Allowance (DA) computation, the adjusted CPI (i.e., Multiplied CPI) is taken as 2.88 times the published CPI. The average of the CPI for the last three months (immediately preceding the applicable quarter) is considered for the calculation.

Hence, the DA applicable for the 4^th quarter of the financial year 2025–26 (i.e., January 2026 to March 2026) is computed as:

[(425.47-277.33)/277.33]*100 = 53.42% ~ 53.40%

This DA of 53.40% is higher than the corresponding DA of 51.80% in the third quarter of 2025–26, resulting in an increase of 1.60% in DA for Q4 2025–26.

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GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR BUREAU

Shram Bureau Bhawan, Block No. 2,
Institutional Area, Sector 38 (West),
Chandigarh – 160036
Dated: 31.12.2025

F.No. 5/1/2021-CPI 

Press Release

Consumer Price Index for Industrial Workers (2016=100) – November, 2025

1. Labour Bureau, an attached office of the M/o Labour & Employment, has been compiling Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country. The index for the month of November, 2025 is being released in this press release.

2. The All-India CPI-IW for November, 2025 increased by 0.5 point and stood at 148.2 (one hundred forty-eight point two).

3. Year-on-year inflation for the month of November, 2025 stood at 2.56% as compared to 3.88% in November, 2024.

Y-o-Y Inflation based on CPI-IW (General)

4. All-India Group-wise CPI-IW for October, 2025 and November, 2025:

CPI-IW: Groups Indices

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GOVERNMENT OF INDIA
MINISTRY OF LABOUR & EMPLOYMENT
LABOUR BUREAU

Shram Bureau Bhawan, Block No. 2,
Institutional Area, Sector 38 (West),
Chandigarh – 160036
Dated: 28.11.2025

F.No. 5/1/2021-CPI 

Press Release

Consumer Price Index for Industrial Workers (2016=100) – October, 2025

1. Labour Bureau, an attached office of the M/o Labour & Employment, has been compiling Consumer Price Index for Industrial Workers every month on the basis of retail prices collected from 317 markets spread over 88 industrially important centres in the country. The index for the month of October, 2025 is being released in this press release.

2. The All-India CPI-IW for October, 2025 increased by 0.4 point and stood at 147.7 (one hundred forty-Seven point seven).

3. Year-on-year inflation for the month of October, 2025 stood at 2.21% as compared to 4.41% in October, 2024.

Y-o-Y Inflation based on CPI-IW (General)

4. All-India Group-wise CPI-IW for September, 2025 and October, 2025:

CPI-IW: Groups Indices

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