8th Pay Commission: Will DA, HRA and Travel Allowance Stop? Over 1 Crore Employees Concerned

The Central Government has officially moved forward with the 8th Pay Commission, releasing the Terms of Reference (ToR) and confirming the formation of the new panel. The three-member commission will be headed by Justice Ranjana Desai, and it has been given 18 months to submit its recommendations. If all goes as planned, the commission’s report is expected to reach the government by mid-2027, after which the Cabinet will review and approve the changes.

However, the biggest question troubling more than one crore central government employees and pensioners is this: Will allowances like DA, HRA and TA stop once the 8th Pay Commission is implemented?

When Will the Recommendations Come Into Effect?

Even though the report will be submitted in 2027, the government has made it clear that the recommendations will be considered effective from 1 January 2026.
This means:

• Employees will receive the benefits later, once the report is accepted

• But arrears will be calculated from 1 January 2026

This system is similar to previous pay commissions, where implementation happens later but employees receive arrears from the official effective date.

Employees’ Biggest Concern: Will DA, HRA and TA Be Discontinued?

There is widespread confusion among employees about the future of:

• DA (Dearness Allowance)

• HRA (House Rent Allowance)

• TA (Travel Allowance)

Many are worried that once the 8th Pay Commission takes effect, these benefits might be stopped or merged.

Currently, the DA rate is 58%, effective from 1 July 2025, and the next revision is scheduled for 1 January 2027.

What Has the Government or Experts Said?

According to policy experts and financial analysts, there is no possibility of DA, HRA or TA being discontinued. These allowances are considered essential components of government employees’ salary structures.

Key points from experts:

• All allowances will continue until the 8th Pay Commission is fully implemented

• Revisions under the 7th Pay Commission will remain in effect until then

• DA hikes every six months will also continue as usual

In short, employees will not lose their allowances during or after the transition period.

DA Hikes in the Next 18 Months: What to Expect

Since the commission will take around 18 months to finalise its report, there will be three DA hikes during this period.
DA is revised twice a year based on the Consumer Price Index (CPI).

According to Ramachandran Krishnamurthy, Payroll Director at Nexdigm, if DA continues to increase at an average of 3% every cycle, the structure may look like this:

• Current DA: 58%

• After 6 months: 61%

• After 12 months: 64%

• After 18 months: 67%

These figures are estimates, and actual increases will depend entirely on CPI data. DA may rise more or less depending on inflation trends.

What Lies Ahead for Employees?

In the coming months, the 8th Pay Commission will analyse:

• Current salary structures

• Price indices and inflation

• Allowances, including DA, HRA, and TA

• Pension revisions

• Pay rationalisation for different categories of employees

Once the report is submitted, the government will make the final decision on implementation.

For now, employees can be assured that:

• DA, HRA and TA will not stop

• Regular DA hikes will continue

• 8th Pay Commission benefits will apply from 1 January 2026

• Arrears will be paid for the period between 2026 and the final approval date