7th Pay Commission: Big news for central government employees. The government has clarified through a new circular that central government employees will be paid their proportional dress allowance in their July 2025 salary. This includes newly recruited employees and employees retiring after July 30, 2025. However, the government also stated that any additional payments will be recovered from employees retiring after October 2025.
What is the circular?
The central government, in its circular dated September 24, 2025, stated that as per the new order, the dress allowance has already been paid in July 2025. This includes all eligible employees, with a few exceptions, being paid either at the full rate or at a partial rate depending on their retirement.
What are the rates of dress allowance?
The government stated that the dress allowance rates increase by 25% every time there is a 50% DA increase. Furthermore, the dress allowance amount is directly credited to employees’ salaries in July every year, and this year the amount has already been credited. The circular stated that as per the Ministry of Finance (MoF) directive dated 16.09.2025, officers retiring mid-year will also be paid a proportional dress allowance, similar to the proportional payment prescribed for new employees.
The government clarified that employees retiring mid-year will be paid proportional dress allowance from June 2025. Any overpayments from employees retiring after October 2025 can be recovered from their October 2025 salary. No recovery will be made from employees who have already retired or who will retire by September 30, 2025.
Dress Allowance for Newly Recruited Employees
The circular also stated that in some circles, the dress allowance for new employees joining after July 2024 was not included in their pay in July 2025. The central government reiterated that before July 2025, all eligible officers, including those joining mid-year (July 2024 – June 2025), will be paid dress allowance as per the prevailing instructions dated June 16, 2025.
