An official statement of the defence ministry said the army's Field Marshal S H F J Manekshaw, currently ailing at a military hospital in Nilgiri, and Marshal of IAF Arjan Singh will be entitled to full salary and allowances equivalent to that for serving chiefs of the two services.
The two marshals were only being paid pension till now.
While 93-year-old Manekshaw was appointed field marshal in 1973 for leading the armed forces to victory in the 1971 war against Pakistan, 88-year-old Singh was appointed the first marshal of the IAF in 2002.
Singh was the country's youngest IAF chief at the age of 44 years and defended the country's airspace during the 1965 war against Pakistan.
Defence Secretary Shekhar Dutt will fly to Chennai tomorrow to personally hand over to Manekshaw the letter hiking the benefits.
The new package, framed "as a mark of the country's deep appreciation of the invaluable services rendered" by them, would be effective from the date they began holding these ranks.
Besides, the two marshals will be entitled to residential accommodation or a rent allowance and leave travel concession according to rules applicable to the service chiefs.
Facilities like a staff officer, a nominated staff car, medical facilities and an official hospitality allowance will be made available to them. The two dignitaries will also be extended the status of state guest on visits to any state.