The Ministry of Defence, Government of India, has issued an official letter bearing No. 1(1)/2024/D(Pay/Services) dated 23rd July 2025, addressed to the Chiefs of Army, Naval, and Air Staff. This letter extends the benefit of notional increment to Armed Forces personnel for the purpose of calculating their pension. It is based on the Department of Personnel & Training (DoPT) Office Memorandum No. 19/116/2024-Pers.Pol.(Pay)(Pt) dated 20th May 2025, and has the concurrence of the Ministry of Defence (Finance – AG/PA) vide their ID No. 01(01)/2024-AG/PA Dy No. 125/2025 dated 02nd July 2025. The move follows a landmark Supreme Court order and brings Armed Forces personnel on equal footing with civilian Central Government employees on this matter.
What Is a Notional Increment?
Every government employee, including Armed Forces personnel, receives a salary increase once a year. This is called an annual increment. For Armed Forces personnel, this increase happens on two fixed dates every year — 1st January and 1st July.
Now imagine a soldier who retires on 30th June or 31st December — just one day before his increment was due. Under the old system, he would miss that increment entirely. His pension would then be calculated on his lower salary — for the rest of his life. Just one day of difference was costing him money every single month, for decades.
A notional increment corrects this injustice. It simply means the government will now count that missed increment — not to increase your salary, but only to work out a higher pension amount. Think of it as the government saying — “We know your increment was due the very next day. We will count it for your pension, even though you had already retired.” The word “notional” just means “on paper.” Your gratuity, leave encashment, and other retirement dues remain completely unchanged — only your monthly pension goes up.
One very important thing to understand clearly: This benefit of notional increment is not for everyone who retired on 30th June or 31st December. It applies only to those who retired on or after 1st January 2016 — that is, under the 7th Pay Commission. Why? Because the fixed increment dates of 1st January and 1st July were introduced only from 2016 onwards. Before that, under the 6th Pay Commission or earlier, every employee had a different increment date based on their own month of joining or promotion. So if you retired before 1st January 2016, this particular benefit unfortunately does not apply to you.
Who Is Eligible?
You may be eligible if all of the following apply to you:
- You served in the Indian Army, Navy, Air Force, or Military Nursing Service
- You retired on 30th June or 31st December of any year after 7th Pay Commission
- You had completed the required years of qualifying service at the time of retirement
- Your service record reflects satisfactory work and good conduct
How Did This Come About?
For years, personnel retiring on these two dates received a lower pension than colleagues who retired just one day later — purely because the annual increment had not yet formally fallen due. Many affected individuals took this matter to court.
The Supreme Court of India ruled in their favour on 11th April 2023, holding that this was unjust. The government’s attempt to challenge this ruling was dismissed by the Supreme Court on 18th December 2024. The Court then issued its final directions on 20th February 2025, laying out clearly how and from when the benefit would apply. DoPT formalised it for civilian employees in May 2025, and the Ministry of Defence extended it to Armed Forces personnel in July 2025.
What Exactly Will You Get?
One additional increment will be added to your last-drawn pay — only for working out your pension figure. Your monthly pension will increase accordingly. Any excess amount already paid to some individuals will not be recovered. However, the enhanced pension will only be payable from 1st May 2023 onwards for most cases. The period before 30th April 2023 will not be covered.
What Action Do You Need to Take?
The government is unlikely to revise every pension automatically. To actually receive the benefit, you will most likely need to take one of the following steps:
- Submit a written representation to your Record Office or the concerned pension-sanctioning authority, quoting the MoD letter No. 1(1)/2024/D(Pay/Services) dated 23rd July 2025 and the Supreme Court order dated 20th February 2025
- If your case is already before a tribunal or court, ask your lawyer to bring this order to the attention of the court at the earliest
- If no response is received after your representation, you may approach the Armed Forces Tribunal (AFT) or seek assistance from a veterans’ legal aid organisation
Keep copies of all documents you submit and note the dates carefully.
📲 Need help drafting your Representation to the Record Office or filing a matter before the Armed Forces Tribunal? Simply WhatsApp NOTIONAL INCREMENT to 8882652865 and our team will guide you through the next steps.
Related: What is MACP? How It Affects Your Pension
In Summary
If you are a retired soldier, sailor, or airman who retired on 30th June or 31st December, this order directly concerns you. The Supreme Court and the Government of India have acknowledged the injustice faced by such retirees and have now provided a remedy. A timely written representation to the right authority could result in a higher monthly pension for the rest of your life.
Based on Ministry of Defence letter No. 1(1)/2024/D(Pay/Services) dated 23rd July 2025 and DoPT Office Memorandum No. 19/116/2024-Pers.Pol.(Pay)(Pt) dated 20th May 2025. Click Here to download
Q1. What is notional increment for Armed Forces personnel?
It is a paper increment added to last-drawn pay solely to calculate a higher pension, for those who retired one day before their increment was due.
Q2. Which Armed Forces personnel are eligible for notional increment ?
Any Army, Navy, Air Force, or Military Nursing Service retiree on those dates, with complete qualifying service and a satisfactory conduct record, qualifies.
Q3. Will I receive the notional increment amount as cash?
No. The increment is notional — meaning it is only used to calculate your pension figure. No cash increment is paid in hand.
Q4. From which date will the increased pension be paid?
For most retirees, the enhanced pension is payable from 1st May 2023 onwards. Enhanced pension for any period before 30th April 2023 will not be paid.
Q5. Will the government revise my pension automatically?
Most likely not. You will need to submit a written representation to your Record Office or pension-sanctioning authority, quoting the relevant orders.
Q6. What if my representation for notional increment is ignored or rejected?
You may approach the Armed Forces Tribunal (AFT). For help drafting your representation or filing before AFT, WhatsApp NOTIONAL INCREMENT to 8882652865.
Q7. Will my gratuity or other benefits also increase?
No. The notional increment applies only to basic pension calculation. Gratuity, leave encashment, and other pensionary benefits remain unaffected.
Q8. Is notional increment benefit available to family pensioners too?
The current order specifically addresses service pension calculation. Family pensioners should seek specific legal advice, as their entitlement depends on individual circumstances.
Q9. Does notional increment benefit apply to all retirees or only those under a specific Pay Commission?
This benefit applies only to personnel retired under the 7th Pay Commission, i.e., from 1st January 2016 onwards. Uniform increment dates of 1st July and 1st January were introduced only under the 7th Pay Commission. Earlier retirees under the 6th Pay Commission or before had increment dates linked to their individual month of appointment or promotion — making this rule inapplicable to them.
