Following the confirmation of the 4% DA Hike (Total 62%) for January 2026, Central Government employees are now eligible for 3 months of arrears. Since the official order is expected in March 2026, the salary for January and February will be paid at the old rate (58%), creating a backlog of dues to be settled likely in the April 2026 payroll.

DA Arrears Jan-Mar 2026: The Math

Employees will receive the enhanced DA (62%) starting from the April salary. The difference of 4% for the months of January, February, and March will be paid as a lump sum “DA Arrears”.

*If the order is issued before March payroll processing, March salary may include the new rate, reducing arrears to 2 months.

Level-Wise Arrears Chart (Estimated)

The following table shows the estimated arrears amount for different Pay Levels based on the minimum Basic Pay in that level.

To calculate your exact arrears: Basic Pay × 0.04 × 3. For precise salary planning, check the Latest 7th Pay Matrix Level 7 Salary 2026 In Hand Calculation.

Tax Liability on Arrears (Form 10E)

Arrears are taxable in the year they are received. However, under Section 89(1) of the Income Tax Act, you can claim relief if the arrears push you into a higher tax slab. You must file Form 10E online before filing your ITR to claim this relief.

Note: If you are in the New Tax Regime (default for FY 2026-27), ensure you check if Section 89 relief is beneficial compared to the flat slab rates.

Impact on HRA and Transport Allowance

• HRA: No change. HRA rates (30%, 20%, 10%) remain the same as DA has not crossed the next threshold (100%).
• Transport Allowance (TPTA): TPTA will increase because the DA component on TPTA rises from 58% to 62%.

See the Latest Transport Allowance Ta Rules Calculation 50 Percent Da for the exact TPTA formula.