Seventh Pay Commission Revised Pension Calculation

Here is how the revised pension will be calculated as per the seventh pay commission pay matrix. This is applicable for all civilian pensioners who retire before 01-01-2016.

After the seventh pay commission comes into being, as an interim measure, the revised pension will initially be equal to

2.57 times the pension fixed at the time of implementation of the 6th pay commission. Let call this figure II.


  1. The pay band and grade pay corresponding to the last drawn pay has to be computed.
  2. This will be used in the Pay Matrix (see below) and the revised basic salary corresponding to the minimum level will be determined.
  3. The number of increments earned by the retiree corresponding to the last drawn pay is then required.
  4. These increments at 3% each will be added to the revised basic salary determined in step 2.
  5. 50% of the amount determined above will be the revised pension. Call this figure II.

If II is greater than the interim revised pension I, then II will be the revised pensio and corresponding arrears will be paid.

If I is greater than II, then I will the revised pension.

Seventh Pay Commission Pay Matrix for Civilian employees

seventh-pay-commission-pay-matrix-for civilians


Suppose your pension fixed as per 6th PC is 10,000.

The interim pension II will be 2.57 x 10,000 = 25,700

Suppose the pay-band corresponding to last drawn pay is 37400-67000 and grade pay is 10,000,

the lowest basic pay as per above pay matrix is 144200.

Suppose  you had received 5 increments at last drawn pay, then

144200 x (1+3%)^5 or

144200 x (1+3%) x (1+3%) x (1+3%) x (1+3%) x (1+3%) =1,67,167

This is the notional pay after 5 increments. Alternatively, one can simply move 5 rows down from 144200 in the pay martix to arrive at 167200. Thanks to Capt. A K Anand for pointing this out.

50% of this notional pay = 83,584. This is referred to as I.

Since is greater than IIwill be new revised pension.

Initially, II will be given and then  will be paid with arrears.

Subscribe to get posts via email

"How to" articles; unbiased analysis; free, yet comprehensive calculators and money Management solutions delivered to your inbox!

Register for the

Pune DIY Investor Workshop Feb 26th, 2017

Install Financial Freedom App! (Google Play Store)

Install Freefincal Retirement Planner App! (Google Play Store)


Buy our New Book!

You Can Be Rich With Goal-based Investing A book by  P V Subramanyam ( & M Pattabiraman. Hard bound. Price: Rs. 399/- and Kindle Rs. 349/-. Read more about the book and pre-order now!
Practical advice + calculators for you to develop personalised investment solutions

Thank you for reading. You may also like

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete  the entire comment or remove the links before approving them.

Do let us know what you think about the article