Dearness Allowance (DA) Calculation for PSU Employees – Q3 2025–26 (October 2025 to December 2025)
Dearness Allowance (DA) is paid as a fixed percentage of the basic salary.
For example, if an employee’s basic salary is Rs.50,000 per month and the DA rate is 30%, then the DA payable will be Rs.15,000 per month.
This amount is paid in addition to the basic salary and other allowances such as House Rent Allowance (HRA).
The Consumer Price Index (CPI), published by the Ministry of Labour and Employment, is used as the benchmark for determining DA.
The Ministry has released the CPI-IW figures for June 2025, July 2025, and August 2025.
CPI-IW Index (Base: 2016=100)
| Month | CPI-IW Index |
|---|---|
| June 2025 | 145.00 |
| July 2025 | 146.50 |
| August 2025 | 147.10 |
Based on these CPI-IW indices, the Dearness Allowance (DA) for Q3 of FY 2025–26
(October–December 2025) has been computed at 51.80%, compared to 49.00% in the previous quarter, reflecting an increase of 2.80%.
DA Rates in Recent Quarters
| FY Quarter | Period | DA Rate | Change (%) |
|---|---|---|---|
| 2023-24 Q1 | Apr – Jun 2023 | 37.70% | – |
| 2023-24 Q2 | Jul – Sep 2023 | 39.20% | +1.50% |
| 2023-24 Q3 | Oct – Dec 2023 | 43.80% | +4.60% |
| 2023-24 Q4 | Jan – Mar 2024 | 43.70% | -0.10% |
| 2024-25 Q1 | Apr – Jun 2024 | 44.30% | +0.60% |
| 2024-25 Q2 | Jul – Sep 2024 | 44.80% | +0.50% |
| 2024-25 Q3 | Oct – Dec 2024 | 47.70% | +2.90% |
| 2024-25 Q4 | Jan – Mar 2025 | 49.60% | +1.90% |
| 2025-26 Q1 | Apr – Jun 2025 | 48.70% | -0.90% |
| 2025-26 Q2 | Jul – Sep 2025 | 49.00% | +0.30% |
| 2025-26 Q3 | Oct – Dec 2025 | 51.80% | +2.80% |
Methodology of DA Calculation
For Dearness Allowance (DA) computation, the adjusted CPI (Multiplied CPI) is taken as
2.88 × published CPI. The average of the last three months’ CPI before the quarter is used.
| Month | CPI-IW Index | Adjusted CPI (×2.88) | Remark |
|---|---|---|---|
| June 2025 | 145.00 | 417.60 | CPI × 2.88 |
| July 2025 | 146.50 | 421.92 | CPI × 2.88 |
| August 2025 | 147.10 | 423.65 | CPI × 2.88 |
| Average Adjusted CPI | 421.06 | ||
The DA formula applied:
DA% = [(421.06 − 277.33) / 277.33] × 100 = 51.83% ≈ 51.80%
This shows an increase of 2.80% over the previous quarter (49.00%).
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