Pension May Get 2X Hike — Check Expected New Amounts

8th Pay Commission Pension Calculator: Pensioners Expect Major Hike With New Fitment Factor

Central government pensioners are eagerly waiting for the 8th Pay Commission recommendations, especially the fitment factor, which will determine how much their pension will increase. While government employees get most of the attention during a new pay commission announcement, this time, pensioners are equally in focus since there are more pensioners than serving employees. As per the government’s pensioners’ portal, as of October 30, 2025, there are 68.72 lakh pensioners from civil, defence, telecom, railway, and postal departments, whereas central government employees are around 50 lakh.

Pensioners are closely tracking debates on medical benefits, commutation period modifications, greater basic pension, gratuity, and tax consequences, as the Terms of Reference (TOR) have already been adopted and an 18-month deadline has been set. Justice Ranjana Prakash Desai has been selected as the chairperson of the 8th Pay Commission.

For getting more info regarding pensions, please visit :

Central Govt Pensioners Portal: https://pensionersportal.gov.in

DOPPW: https://doppw.gov.in

Fitment Factor: Key to Pension Hike

The fitment factor acts as a multiplier for revising salaries and pensions. For the 7th Pay Commission, it was 2.57. Pensioners expect the 8th Pay Commission fitment factor to bring a substantial revision in their pension amount.

Example of revised pension calculation at different fitment factors:

• Previous Basic Pay: Rs 40,000

• 50% of the pension : Rs 20,000

Fitment factor 2.57 → New salary ₹1,02,800 → New pension ₹51,400

Fitment factor 3.00 → New salary ₹1,20,000 → New pension ₹60,000

Fitment factor 3.68 → New salary ₹1,47,200 → New pension ₹73,600

A ₹25,000 pension can turn into ₹50,000 don't you wonder how?

Example:

If the fitment factor becomes 2.

That means:

₹25,000 × 2 = ₹50,000

What pensioners expect from the 8th Pay Commission

The 8th CPC TOR includes examination of pay, allowances and retirement benefits like pension, gratuity, family pension, and medical services.

Key areas discussed

• Pension cut should stop after 12 years instead of 15 years.

• Medical allowance should increase from ₹3,000 per month to ₹20,000 per month.

• More CGHS hospitals at the district level

TOR highlights for pensioners

Review pension, gratuity, and terminal benefits

Merge DA/DR with pension

Implement full pension restoration after 12 years

Consider Parliamentary Committee recommendations for pension enhancement every 5 years

Review restoration of old defined pension scheme for post-2004 recruits

Dearness Relief, Family Pension & Taxation

Dearness Relief (DR)

• DR rises as pension increases

• Example:

• Earlier, pension was ₹20,000 and 20% DR was ₹4,000.

• After revision, pension becomes ₹30,000 and 20% DR becomes ₹6,000.

Family pension calculation

• Usually 30% of basic pension

Example:

• Earlier pension Rs 20,000 → Family pension Rs 6,000

• Revised or new pension Rs 30,000 → Rs 9,000

Tax impact after revision

• Pension taxable under "Income from Salaries"

• With higher pension, tax liability rises

• Family pension taxable under "Income from Other Sources" with Rs 15,000 annual exemption

EPS & Enhanced Pension

• EPS tied to last drawn/revised pay

• Higher fitment factor = Higher EPS and enhanced pension

Example:

• Old basic Rs 40,000 → EPS Rs 20,000

• After factor 3.0 → Basic Rs 1,20,000 → EPS Rs 60,000

Commutation & Restoration

• Current 40% commutation = reduced pension for 15 years

• Proposal: restore commuted portion after 12 years

Conclusion

With a higher fitment factor, prompt commuted pension restoration, improved medical facilities, and parity with serving employees, pensioners anticipate the 8th Pay Commission will provide significant relief. With more pensioners than employees, the spotlight is on revisions that ensure better financial security, higher benefits and fair taxation for retired central government personnel.