Central government employees are eagerly awaiting the recommendations of the 8th Pay Commission. The release of this report could bring three major forms of relief to employees, a prospect that has prompted several unions to voice their demands.
Central government employees are awaiting the 8th Pay Commission’s recommendations with great anticipation. As there is still some time before the report is released, employee unions are presenting their demands to the Commission. Recently, organizations representing central government employees and pensioners have reiterated three long-standing demands concerning the Dearness Allowance (DA).
The unions are calling for the DA to be revised every three months, for it to be merged into the basic salary once it exceeds 25%, and for the Dearness Allowance to be exempted from income tax. These demands have been placed before the 8th Pay Commission; however, the government has not yet approved any of them.
What are the three main demands of the employee unions?
The 8th Pay Commission is currently in the midst of a series of meetings across various states and union territories. Over the past few months, the Commission has held discussions in locations including Delhi, West Bengal, Ladakh, and Uttar Pradesh. During these meetings, employee unions have once again raised three long-standing demands related to the Dearness Allowance. Let’s take a look at what these three demands are:
DA revision every 3 months instead of every 6 months
Currently, the Dearness Allowance (DA) for central government employees is revised twice a year—typically effective from January 1st and July 1st. These adjustments are based on inflation data. However, employee unions are requesting that the Dearness Allowance be revised every three months.
Demand for Merging DA into Basic Salary Upon Reaching 25%
A second demand from employee organizations is that once the Dearness Allowance (DA) exceeds 25%, it should be merged into the basic salary. The Federation of National Postal Organizations (FNPO) has included this demand in its memorandum submitted to the 8th Pay Commission. The organization proposes that the DA be merged into the basic salary—and the Dearness Relief (DR) for pensioners into their basic pension—once the rate surpasses 25%.
Demand for Exemption of Dearness Allowance from Income Tax
A third demand from employee organizations is that the Dearness Allowance should be exempted from income tax. The FNPO argues that the DA is provided to offer relief to employees against rising inflation; therefore, it should not be subject to taxation. The organization has also requested that, in addition to the Dearness Allowance, the House Rent Allowance (HRA) and Transport Allowance be exempted from income tax.
When Will the Report Be Submitted?
It should be noted that the Central Government constituted the 8th Pay Commission on November 3, 2025. It is chaired by Justice Ranjana Prakash Desai and consists of three members. The Commission is required to submit its final report to the Central Government within 18 months from the date of its constitution. Before finalizing the report, the Commission will consider the demands and suggestions put forward by central government employees, pensioners, employee organizations, and other relevant stakeholders.
