The Uttarakhand government has increased the dearness allowance for pensioners and family pensioners under the seventh pay scale by three per cent. The increase follows an earlier announcement of increasing the allowance for state employees on the seventh pay scale on October 11.

Under the initiative, pensioners will now receive 58 per cent dearness relief instead of 55 per cent. Finance Secretary Dilip Jawalkar issued an order in this regard on Monday. With benefits expected for over 40,000 pensioners, the dearness relief is effective from 1 July 2025.

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Along with Uttarakhand, several other states have approved the 3 per cent DA hike for employees and pensioners. These include Uttar Pradesh, Bihar, Haryana, Assam, Arunachal Pradesh and Rajasthan.

What Is Dearness Allowance?

Dearness allowance refers to a cost-of-living adjustment that is calculated as a percentage of the basic salary to offset the impact of inflation. This cost is paid by the Government to public sector employees and pensioners.

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As per the provisions of the Income Tax Act 1961, it is mandatory to declare the tax liability with respect to DA while filing an ITR.