Friday, January 29, 2016

Thursday, January 28, 2016

BSNL-Various Gazette Notifications issued by EPFO from Time to Time


BHARAT SANCHAR NIGAM LIMITED
(A Govt. of India Enterprise)

NO.500-85/CA-II/BSNL/EPF/2011/Vol.VI
Dated 19.01.2016
To,
The IFAs,
All Circles

Sub.: Various Gazette Notifications issued by EPFO from Time to Time

This office has been receiving queries regarding Emplo
BSNL
yees Pension Scheme.

In this regard, it is informed that EPFO vide its letter no. Actuarial / 18(2)2008/ Vol.III/7738 dated 29.08.2014 (copy enclosed) has already clarified that henceforth, EPS will apply only to EPF members whose pay at the time of becoming PF member is not more than Rs.15000/- per month on or after 01.09.2014. The entire employer and employee contribution shall remain in the Provident Fund and no diversion to EPS shall be made for all new PF members on or after 01.09.2014 having salary more than Rs. 15000/- at the time of joining.

In this connection, it is mentioned that this office has already issued instructions to act in accordance with the Gazette Notifications issued by EPFO, from time to time, without waiting for endorsement from the Corporate Office as the non compliance of the EPF guidelines attract penal provisions.

It is further mentioned that suitable action may be taken by the circles for rectification of any erroneous deduction made and deposited with EPFO under the EPS head for the employees covered under the above mentioned letter of EPFO dated 29.08.2014.

All BSNL units are hereby requested to kindly take necessary action in accordance with the instructions issued by EPFO.

Encl: As above

(V.M.Gupta)
Dy. General Manager (CA-III)

EMPLOYEES PROVIDENT FUND ORGANISATION
(Ministry of Labour & Employment, Govt. of India)
Head Office
Bhavishya Nidhi Bhawan, 14, Bhikaiji Came Place, New Delhi – 110 066.

No. Actuarial/18(2)2008/Vol.III/7738
Dated: 29.08.2014
To
All Addl. Central P.F. Commissioners (Zones)
All Regional P.F.Commissioners (In-Charge of Region)

Sub: Gazette Notification providing for increase in wage ceiling under EPS 1995 from Rs. 6500 to Rs.10000/- which shall come into force on and from the 1st day of Sept 2014.
Sir.

This is in continuation of this office circular No Actuary/l 8(2)2008/ Vol.111/5905 dated 23.07.2014 wherein it was informed that the Employees’ Pension Scheme 1995 is being amended to increase the wage ceiling from Rs.6500/- per month to Rs. 15,000/- per month in the Employees’ Pension Scheme, 1995.

2. The proposed amendments have since been noti red vide Gazette Notification No. GSR 609 (E) which shall come into force on and from the 1st day of September, 2014 (Copy of notification enclosed).

3. Accordingly, with effect from the 1st day of September, 2014, the pensionable salary for all cases of exit/death on or after 01.09.2014, for calculating pension shall be the average monthly pay drawn during the contributory period of service in the span of 60 months preceding the date of death/exit from the membership of the Employees” Pension Fund. The pensionable salary shall be calculated on pro-rata basis separately for the period up to 31.08.2014 up to wage ceiling of R.6,500/- per month and for the subsequent period upto the wage ceiling of Rs.15,000 per month. Similarly. the Withdrawal Benefit shall be based on the weighted wages at different wage ceilings. As already informed necessary amendments in the applicable on software are being carried out and the necessary software shall be released by I.S. Division at the earliest.

4. Accordingly, requisite steps may be taken so hat full details of wages for 60 months are available to settle the pension claims in accordance with the proposed modification. In this regard, Form 10-C & Form 10 D are also being redesigned to incorporate the above changes and shall be circulated soon. However in the meantime wage details be obtained by attaching additional sheet or giving details of 60 months of wages along with Form 10-D in respect of all members having date of exit from EPS 1995.

5. The members having date of exit from EPS, 1995 on account of superannuation/option date for commencement of early pension etc. prior to 01.09.2014 shall get Pensionary benefits on the basis of the existing pensionable salary calculations ie by taking 12 months average.

6. Further, with effect from 01.09.2014, wherever employer & employees have opted to contribute on salary exceeding Rs.6,500/- per month such employer & employees will have to exercise a fresh option to contribute on salary exceeding Rs.15,000/- per month subject to the condition that such member would have to contribute the Government’s share of contribution @ 1.16% on the salary exceeding Rs.15,000/- per month from his/her share of contribution. The fresh Option is to be exercised within a period of 6 months. It is essential to know with certainty the employee who are currently permitted to contribute to EPS on higher wages, so that fresh options can be called for. Accordingly, you may immediately flag all such cases of contribution on salary exceeding Rs.6,500/- per month and obtain fresh options in a time bound manner. It may be made known to the existing optees that if the fresh option is not exercised it shall be deemed that the employee has not Opted in allowing contribution over age ceiling and the contributions to Employees Pension Fund made above the wage ceiling in respect of the member shall be diverted to the Provident Fund account of the memer along with interest as declared under the Employees’ Provident Fund Scheme from time to time.

7. Furthermore, with effect from 01.09.2014 the provisions for contribution on higher salary has been deleted and as such no new options can be allowed to any member of EPS, 1995 on and after 01.09.2014.

8. As EPS will henceforth apply only to EPF members whose pay at the time of becoming PF member is not more than Rs. l5,000/- per month on or after 01.09.2014 the entire employer and employee contribution shall remain in the Provident Fund and no diversion to EPS shall be made for all new PF members on or after 01.09.2014 having salary more than 15,000/- at the time of joining. This must be ensured as any negligence on this issue may lead to unwarranted litigations.

9. The above actions may be taken without any deviation and officer in charge shall be responsible for compliance of above directions under his jurisdiction.

(This issues with the approval of CPFC)

Yours faithfully,
sd/-
(CHANDRAMAULI CHAKRABORTY)
REGIONAL E.F.COMMISSIONER-I (Pensions)












dopt instruction on service matters





Constitution of Empowered Committee of Secretaries for processing the Report of the Seventh Central Pay Commission – Finance Ministry Orders on 27.1.2016


Members of Empowered Committee for processing the Report of the 7th Pay Commission

Constitution of Empowered Committee of Secretaries for processing the Report of the Seventh Central Pay Commission – Finance Ministry Orders on 27.1.2016

No.1-4/2015-E.III(A)
Government of India
Ministry of Finance
Department of Expenditure

New Delhi, dated the 27th January, 2016

OFFICE MEMORANDUM

Subject: Constitution of Empowered Committee of Secretaries for processing the Report of the Seventh Central Pay Commission

It has been decided with the approval of the Cabinet to set up an Empowered Committee of Secretaries to process the recommendations of the Seventh Central Pay Commission.

The Committee will have the following members :

1. Cabinet Secretary - Chairman
2. Finance Secretary/Secretary (Expenditure) - Member
3. Secretary, Department of Personnel & Training - Member
4. Secretary, Department of Pension & PW - Member
5. Secretary, Ministry of Home Affairs - Member
6. Secretary, Ministry of Defence - Member
7. Secretary, Department of Revenue - Member
8. Secretary, Department of Post - Member
9. Secretary, Department of Health - Member
10. Secretary, Department of Science & Technology - Member
11. Chairman, Railway Board - Member
12. Deputy Comptroller & Auditor General - Member
13. Secretary (Security), Cabinet Secretariat - Member
2. The Committee may co-opt any other Secretary, whenever found necessary.

3. The Empowered Committee will function as a Screening Committee to screen the recommendations of the Commission after taking into account the views of the concerned stakeholders, viz, the Ministries/Departments, Staff Associations and the JCM, so as to firm up the final conclusions for approval of the Cabinet.

4. The Implementation Cell created in the Department of Expenditure shall function as Secretariat for the Empowered Committee of Secretaries.

5. The final recommendations of the Empowered Committee of Secretaries will be submitted for approval of the Cabinet.

sd/-
(Annie George Mathew)
Joint Secretary to the Government of India

Empowered committee of Secy.



Sunday, January 24, 2016

India code finfer

Payment of Agency Commission on pension accounts – RBI Circular on 21.1.2016


Reserve Bank Of India

RBI/2015-16/294
DGBA.GAD.No.2278/31.12.2010/2015-16
January 21,2016
The Chairman & Managing Director/
The Chief Executive Officer
All Agency Banks

Dear Sir/Madam

Payment of Agency Commission on pension accounts

As you may be aware, agency banks are being compensated at Rs.65 per transaction for handling pension computation, payment and related services on behalf of Central and State Governments. As per the norms followed by the Government, a pensioner’s account should not have more than 14 credit transactions in a calendar year attributable to pension and related arrear payments, if any.

2. It has however come to our notice that certain banks are apportioning payment of arrears on account of Dearness Relief (DR) and/or delay in start of pension monthwise, thus, resulting in inflated agency commission claims. It is reiterated that number of commisionable transactions for payment of agency commission on account of pension in a year should not exceed 14. This includes one monthly credit for payment of net pension and a maximum of two per year for payment of arrears on account of increase in DR, if applicable.

3. It is also reiterated that cases involving payment of arrears on account of late start/restart of pension qualifies as a single transaction for claiming of agency commission. In other words, any payment of arrears on account of late start/restart of pension should be effected in a single credit transaction instead of separate monthly credits.

4. Some of the Central Government Departments and State Governments prefer to compute the pension figures on their own and pass them on to banks for payment. Such transactions may be included under non-pension payments, on which agency commission is payable on a turnover basis as per the existing norms (currently at 5.5 paise per Rs. 100/-).

Yours faithfully

(Manish Parashar)
Deputy General Manager

Thursday, January 21, 2016

7th CPC implementation may be delayed

http://wap.business-standard.com/budget/article/implementation-of-pay-panel-award-likely-to-be-deferred-116011800038_1.html

News about delay in implementation of 7th CPC's recommendation: Analysis by Karnataka CoC

7th CPC and Central Government finances

Comrades,
          There are various reports in the media about the impact of the 7th CPC recommendations on the common man and the government resources at large, the reports suggest that the Government may postpone the 7th CPC implementation also till its finances are set right. 

These reports are totally wrong.

A)  Let us examine the Revenue Secretary Shri Hasmukh Adhia statements which are also published in the news papers. 

“So far, 1.8 crore refunds for assessment year 2015-16 have been processed, he said. In the past, refunds have been held up for years as the government sought to show healthier finances.”


      “Data released by the government showed that over Rs 5 lakh crore was locked up in tax disputes at various levels, with some of the cases going back over 10 years. In value terms, over half the cases related to income tax with 30% of the cases involving corporation tax.” 

B) The crude oil prices has come down from 140 $ to just 30$ a barrel in last year thus the Central Government finances have improved a lot. 

Source: CLICK HERE .

   The Revenue Secretary Shri Hasmukh Adhia statements also indicate that the  government sought to show healthier finances. and the Central Governement  should accept the Staff side demands regarding minimum wage, fitment formula & allowances. There is no case for  extension of time limit for extension of the 7th CPC implementation. Hence the news paper reports are totally wrong.

The news paper reports also suggest that additional amount of    Rs  one lakh crores of public money has been spent for implementation of the 7thCPC recommendations for 35 lakhs central Government employees, 15 lakhs defence employees and 55 lakhs pensioners , perhaps the strongest criticism of Pay Commission awards is that they play havoc with government finances and also  state government demand support to implement the 7th CPC recommendations. At the aggregate level, these concerns are somewhat exaggerated and which is totally wrong.

Let us note following important points:
  • The DA amount increase is on basic pay only and also Transport allowance is increasing .
  • The wage hike annually is around 15% .
  • The numbers of retired persons are more in the last 5 years compared to new recruiters. Even the vast difference between the wages of new person joining the Central Govt and retired person.
  • The difference between the actual wage hike as indicated in the 7th CPC and the website of Government of India Ministry of Finance Department of Expenditure Pay Research Unit for Brochure on Pay and Allowances of Central Government Civilian Employees.
  • The difference between the actual wage hike as indicated in the 7th CPC and the Finance Minster statement on the floor of the House on the Medium term Expenditure Framework Statement laid before Parliament during August, 2015.
  • PAY RESEARCH UNIT DEPARTMENT OF EXPENDITURE MINISTRY OF FINANCE NEW DELHI brings out a report on pay and allowances of Central Government civilian employees on an annual basis which include the Ministry of Railways, Ministry of Home Affairs, Department of Posts, Ministry of Defence (Civil), UNION TERRITORY and other 100 departments. According to them the REGULAR CIVILIAN EMPLOYEES IN CENTRAL GOVERNMENT AND UNION TERRITORY ADMINISTRATIONS AS ON 1.3.2013 is 31,80,608 persons.
  • According to the Defence Minister statement in Parliament is around 15 lakhs persons
    (Army Officers 38574, Other Ranks, 1132473, Navy Officers 8896 , Sailors 51608 , Air Force Officers 11918 , Airmen 130209)
  • The 7th CPC has abolished many allowances, which is not reflected in the actual impact on hike.   
The 7th CPC in its report vide para no 16.1 has indicated that the total expenditure for the year 2016-17 towards Central Government Employees including, Civilians, Railways , Defence personnel before implementation of the 7th CPC report as Rs 4,33, 500.00 crores which include Pay   of Rs 244300.00 Crores , Allowances which include HRA Rs 12400.00 crores, other Allowances Rs 24300.00 crores, Pension Rs 142600.00 crores.
The 7th CPC in its report vide para no 16.1 has indicated that the total expenditure for the year 2016-17  (With VII CPC) as Rs 5,35, 600.00 crores which include Pay of Rs  283400.00 Crores , Allowances which include HRA Rs 29600.00 crores, other Allowances Rs 36400.00 crores, Pension Rs 176300.00crores.      
The 7th CPC has also stated that  total financial impact in the FY 2016-17 is likely to be ₹1,02,100 crore, an increase of nearly 23.55 percent over the Business As Usual scenario.
Now with the facts of the case is that the expenditure as stated in the above 7th CPC report is not true in nature. This  7th CPC in its report vide para no 16.1 has indicated that the total expenditure for the year 2016-17  (With VII CPC) as Rs 5,35, 600.00 is not all true the figure is not likely to cross 3.5 lakhs crores including pension amount.  
  • Expect HRA no other allowances has increased, HRA has increased by just 106% over the existing amount.
  • Out of the total expenditure of Rs  5890.63 crore on HRA in 2013-14, the HRA expenditure for X class cities is Rs 2541.55 crore which is around 43.14% of the total expenditure on HRA.( Finance Ministry statement)
  • Majority of the Central Govt Employees don’t avail HRA and many employees reside in “C” class city. . Indian defence personnel including Army personal stay in the military camp .
  • The 7th CPC had indicate that the HRA expenditure Rs 12400.00 crores against the Finance Ministry statement of  Rs  5890.63 crore on HRA. It has also projected that Rs 29600.00 cores expenditure on HRA which is not true as total expenditure on HRA is not likely to be more than Rs 13,000/- crores.
Let us examine the 7th CPC report vide para no 3.65 and 3.66 and the website of Government of India Ministry of Finance Department of Expenditure Pay Research Unit for Brochure on Pay and Allowances of Central Government Civilian Employees visit website :http://finmin.nic.in/pru/BROCHURE/PayAllowance2013-14E.pdf.

finmin.nic.in
The 7th CPC report para number 3.65 and 3.66
The Commission has obtained details of expenditure from each ministry/department for up to FY 2012-13. Of the total expenditure on pay and allowances of Rs 1,29,599 crore for the financial year 2012-13.
If you compare these figures with  PAY RESEARCH UNIT DEPARTMENT OF EXPENDITURE MINISTRY OF FINANCE NEW DELHI expenditure statement for the year 2012-13  please refer websitehttp://finmin.nic.in/pru/BROCHURE/brochure2012-13.pdf
The total expenditure on Pay and Allowances (excluding Productivity Linked Bonus/ Ad-hoc Bonus, Honorarium, Encashment of Earned Leave and Travelling Allowance) for Regular Central Government Civilian employees including employees of the Union Territories Rs 108070.66 crore in 2012-13. This expenditure includes Ministry/ departments like  Ministry of Railways, Ministry of Home Affairs, Department of Posts, Ministry of Defence (Civil), UNION TERRITORY and other 100 departments

Hence the 7th CPC para number 3.65 is wrong.
There are four possibilities of checking the 7th CPC statement of para no 16.1,    
1st possibility is as follows: The salary and allowance expenditure or the year 2013-14 is Of the total expenditure on pay and allowances ofRs 1,27,000 crore for the financial year 2013-14. Which include the Ministry of Railways, Ministry of Home Affairs, Department of Posts, Ministry of Defence (Civil), UNION TERRITORY and other 100 departments as per the PAY RESEARCH UNIT DEPARTMENT OF EXPENDITURE MINISTRY OF FINANCE NEW DELHI expenditure statement for the year 2013-14.
Add 35% increase expenditure 44,000/ crores ( add 25% DA)
Add Pension amount of Rs  90,000 crores
Add Defence employees expenditure of Rs 70,000/-
So total expenditure is 3,31,000 crores  
  Add 14% increase in wage hike on 2.75 lakh crore for serving employees and 20% hike for pensioners . Which works out to Rs 60,000/- crores increase not one lakhs crores. Deduct Rs 10,000/ cores as Income tax, CGEIS and increased CGHS, licensee fee rates.  Deduct abolition of allowances amount of Rs 10,000/- crores. Net additional burden for Central Govt.  is Rs 40,000/- crores.
DA amount increase (2nd possibility):The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission (CPC). The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be in the order of Rs. 6655.14 crore per annum and Rs.4436.76 crore in the financial year 2015-16 (for a period of 8 months from July, 2015 to February, 2016). 
DA increase for 50 lakhs employees is Rs. 6655.14 crores per annum * 12/ 8 = Rs 9982 crores for 6% increase in DA, for 14% wage hike it is  9982*14/6 = Rs 23292 crores.
Pension.
  DA increase for 55 lakhs employees is Rs. 4436.76 crores per annum * 12/ 8 = Rs 6655crores for 6% increase in DA, for 14% wage hike it is   *14/6 = Rs15528 crores.
So total additional expenses for wage hike is Rs 38820 crore add Rs 6,000/- towards HRA increase and additional pension hike of Rs 5,000/- so total hike is around Rs 50,000/- crores. Deduct Rs 10,000/ cores as Income tax, CGEIS and increased CGHS, licensee fee rates. Deduct abolition of allowances amount of Rs 10,000/- crores.  Net additional burden for Central Govt. is Rs 30,000/- crores
    3rd Possibility Pay commission statement : 
Let us examine para no 3.66 of the 7th CPC report the expenditure per capita on pay and allowances for Civil Central Government personnel for FY 2012-13 was Rs 3.92  lakh per annum i.e Rs  32666/- per month taking into account of DA percentage as 80%. (take basic pay of Rs 15,000/-)
Add 45% DA for the period 1/4/2013 to 1/1/2016 average salary of Civil Central Government personnel as on 1/1/2016 at 125% DA which works around Rs 37500/- per month (Rs 4.50 lakhs per annum ) without 7th CPC recommendations .
Multiply by 50lakhs CEG employees including Defence employees , Railways , Home, Postal etc. it works out to 2.25 lakhs crores. So total expenditure on salary as on 1/1/2016 is at 2.25 lakhs crores. Add pension amount of Rs 1 lakh crores hence total expenditure is at 3.25 lakh cores .
The 7th CPC in its report vide para no 16.1 has indicated that the total expenditure for the year 2016-17 towards Central Government Employees including, Civilians, Railways , Defence personnel before implementation of the 7th CPC report as Rs 4,33, 500.00 crores , In this case the difference works out to more than one lakh crore .
Add 14% increase in wage hike on 1.75 lakh crore for serving employees and 20% hike for pensioners . Which works out to Rs 60,000/- crores increase not one lakh crores. Deduct Rs 10,000/ cores as Income tax, CGEIS and increased CGHS, licensee fee rates. Deduct abolition of allowances amount of Rs 10,000/- crores. Net additional burden for Central Govt.  is Rs 40,000/- crores. 
4th Possibility is as follows:
Medium term Expenditure Framework Statement laid
Before Parliament by Minister of Finance August, 2015
Budget Projection for Estimates 2015-16:  Revenue Expenditure
1)      Salary Rs 100619 crores
2)      Pension Rs 88521 crores.
3)      Add for Railway employees Rs 45,000/- crores.
4)      Add for Defence employees Rs 60000/ crores
Total Expenditure on salary and allowances including pension amount is 2,91,000 crores.

 Add 14% increase in wage hike on 1.90 lakh crore for serving employees and 20% hike for pensioners . Which works out to Rs 65,000/- crores increase not one lakh crores. Deduct Rs 10,000/ cores as Income tax, CGEIS and increased CGHS, licensee fee rates. Deduct abolition of allowances amount of Rs 10,000/- crores. Net additional burden for Central Govt.  is Rs 45,000/- crores.
Hence the net increase in salary and pension is just around Rs 40,000/- crores not Rs one lakhs crores as stated in the 7th CPC out of which 15,000/ crores is for Defence employees, Rs 15,000 crores by the Railway's . The 7th CPC projections of 5.5 lakhs cores expenditure  is also wrong.   
The Central Governement  should accept the Staff side demands regarding minimum wage, fitment formula & allowances. Hence the news paper reports are totally wrong. We need to educate the members and prepare for a strugle. 
Comradely yours

(P.S.Prasad)
General Secretary  

Tuesday, January 19, 2016

Pension/Retirement benefits related demands included in Charter of Demands by NJCA (National Joint Council of Action)

7th CPC recommendations:  Pension/Retirement benefits related demands included in Charter of Demands by NJCA (National Joint Council of Action) submitted to Cab. Secy.GOI vide their No.NJC/2015/7th CPC dated December 10, 2015

Demand No 13 Revise the pension and other retirement benefits as under:-

(a) Parity between the past and present pensioners to be brought about on the basis of the 7th CPC recommendations with the modification that basis of computation to be the pay level of the post / grade/ scale of pay from which one retired; whichever is beneficial.

(b) Pension to be 60% of the last pay drawn in the case of all eligible persons who have completed the requisite number of years of service.

(c) The family pension to be 50% of the last pay drawn.

(d) Enhance the pension and family pension by 5% after every five years and 10% on attaining the age of 85 and 20% on attaining the age of 90.

(e) Commuted value of pension to be restored after 10 years or attaining the age of 70, whichever is earlier. Gratuity calculation to be on the basis of 25 days in the month as against 30 days as per the Gratuity Act.

(f) Fixed medical allowance for those pensioners not covered by CGHS and REHS to be increased to Rs. 2000 pm.

(g) Provide one increment on the last day in service if the concerned employee has completed six months or more from the date of grant of last increment.

Demand No 14: Exclude the Central Government employees from the ambit of the National Pension Scheme (NPS) and extend the defined benefit pension scheme to all those recruited after 1.1.2004

Demand No: 15 In the absence of any recommendation made by 7 CPC, the Government must withdraw the stipulated ceiling on compassionate appointments




HC relief to retired govt employees-The court observed “There should be equality of health benefits to retirees. Right to health is a human right. The health of the people should be the supreme law based on the legal maxim ‘salus populi suprema lex esto’.”




HC relief to retired govt employees-The court observed “There should be equality of health benefits to retirees. Right to health is a human right. The health of the people should be the supreme law based on the legal maxim ‘salus populi suprema lex esto’.” 

HC relief to retired govt employees

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 4621 of 2011;Reserved on : 23.12.2015;Date of decision 28.12.2015
Union of India and another ……Petitioners.
Vs.

Shankar Lal Sharma .................Respondent. 



The High Court has directed the Centre to ask employees at the time of their retirement if they want to be covered under the Central Service (Medical Allowance) CS (MA) Rules or the Central Government Health Scheme (CGHS). A division bench comprising Justice Rajiv Sharma and Justice Sureshwar Thakur, in order to avoid litigation, made it clear that the judgment was applicable to all retired government officials residing in non-CGHS areas. The court observed: “There should be equality of health benefits to retirees. Right to health is a human right. The health of the people should be the supreme law based on the legal maxim ‘salus populi suprema lex esto’.” The court passed the order in a case of medical reimbursement of a retired Central government employee. While dismissing the petition of the Central government, the court observed that a ‘socialist state’, as the Preamble depicts, is the basic structure of the Constitution of India read with other cognate Articles of Part-III and Part-IV of the Constitution of India. The ‘welfare of state’ is the basic feature of the Constitution of India. There is a difference between ‘basic structure’ and ‘basic feature’ of the Constitution. The action of the Union of India not to reimburse medical bills to the respondent and also not giving an option to him is illegal, arbitrary, capricious, discriminatory and in violation of Articles 14, 16 and 21 of the Constitution of India. The court observed: “There cannot be any discrimination while extending the social benefits to serving and retired employees. It is the prime responsibility of the state to protect the health of its workers.” It said: “The legislation and the policies of the state must be pro-poor, pro-Scheduled Caste, Scheduled Tribes and other weaker sections, including the pensioners. The system must give due respect and   maintain the dignity of the retired employees by providing them sufficient means, including good health care in their twilight years.” The court observed: “The decision in matters pertaining to the health of the employee should be taken with utmost humane approach. A serving employee, who enjoys benefits under the CS(MA) Rules, 1944, cannot be left high and dry immediately after retirement for want of medical care. His medical issues are required to be looked into with more sensitivity, compassion and sympathy. His genuine requirements for medical treatment cannot be permitted to be buried in the labyrinth of red-tapism.”


Monday, January 18, 2016

Implementation of pay panel award likely to be deferred

Implementation of pay panel award likely to be deferred: The announcement of a deferral is expected to be part of Jaitley's Budget speech on February 29

INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2015-16 ASSESSMENT YEAR 2016-2016 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961

I
Circular 20/2015
Dated the 2nd December, 2015

9. CALCULATION OF INCOME-TAX TO BE DEDUCTED:

9.1 Salary income for the purpose of section 192 shall be computed as follow:-

(a) First compute the gross salary as mentioned in para 5.1 including all the incomes mentioned in para 5.2 and excluding the income mentioned in para 5.3.

5. COMPUTATION OF INCOME UNDER THE HEAD "SALARIES"

(b) Allow deductions mentioned in para 5.4 from the figure arrived at (a) above and compute the amount to arrive at Net salary of the employee

5.4 DEDUCTIONS U/S 16 OF THE ACT FROM THE INCOME FROM SALARIES

(c) Add income from all other heads- ‘House property’, ‘Profits & gains of Business or Profession’, Capital gains and Income from other Sources to arrive at the Gross Total Income as shown in the form of simple statement mentioned para 3.5. However it may be remembered that no loss under any such head is allowable by DDO other than loss under the Head “Income from House property”.

3. SECTION 192 OF THE INCOME-TAX ACT, 1961: BROAD SCHEME OF TAX DEDUCTION AT SOURCE FROM "SALARIES"

(d) Allow deductions mentioned in para 5.5 from the figure arrived at (c) above ensuring that the relevant conditions are satisfied. The aggregate of the deductions subject to the threshold limits mentioned in para 5.5 shall not exceed the amount at (b) above and if it exceeds, it should be restricted to that amount.

5.5 DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT

This will be the amount of total income of the employee on which income tax would be required to be deducted. This income should be rounded off to the nearest multiple of ten rupees.

9.2 Income-tax on such income shall be calculated at the rates given in para 2.1 of this Circular keeping in view the age of the employee and subject to the provisions of sec. 206AA, as discussed in para 4.8. Rebate as per Section 87A upto Rs 2000/- to eligible persons (see para 6) may be given. Surcharge shall be calculated in cases where applicable (see para 2.2).

2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2015

6. REBATE OF Rs 2000 FOR INDIVIDUALS HAVING TOTAL INCOME UPTO Rs 5 LAKH [SECTION 87A]

9.3 The amount of tax payable so arrived at shall be increased by educational cess as applicable (2% for primary and 1% for secondary education) to arrive at the total tax payable.

9.4 The amount of tax as arrived at para 9.3 should be deducted every month in equal installments. Any excess or deficit arising out of any previous deduction can be adjusted by increasing or decreasing the amount of subsequent deductions during the same financial year.
***
ANNEXURE-I
SOME ILLUSTRATIONS
Example 1

For Assessment Year 2016-17

(A) Calculation of Income tax in the case of an employee (Male or Female) below the age of sixty years and having gross salary income of:

i) Rs.2,50,000/- ,
ii) Rs.5,00,000/- ,
iii) Rs.10,00,000/-
iv) Rs.20,00,000/-. and
v) Rs. 1,10,00,000/-

(B) What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:

Particulars
Rupees
Rupees
Rupees
Rupees
Rupees
(i)
(ii)
(iii)
(iv)
(v)
Gross Salary Income
2,50,000
5,00,000
10,00,000
20,00,000
1,10,00,000
(including allowances)
Contribution of G.P.F.
45,000
50,000
1,00,000
1,00,000
1,00,000

Computation of Total Income and tax payable thereon

ParticularsRupeesRupeesRupees
Rupees
Rupees
(i)
(ii)(iii)
(iv)
(v)
Gross Salary2,50,0005,00,00010,00,000
20,00,000
1,10,00,000
Less: Deduction U/s 80C
45,000
50,000
1,00,000
1,00,000
1,00,000
Taxable Income2,05,0004,50,0009,00,000
19,00,000
1,09,00,000
(A) Tax thereon
Nil
18,000*1,05,000
3,95,000
3095000
Surcharge
3095000
Add:
(i) Education Cess @ 2%.
Nil
360
2100
7,900
68,090
(ii) Secondary and Higher
Nil
180
1050
3950
34,045
Education Cess @1%
Total tax payable
Nil
18,540
1,08,150
406850
35,06,635
(B) TDS under sec. 206AA in
Nil
38,000
1,30,000
406850
35,06,635
case where PAN is not
furnished by the employee
include Rebate of Rs 2000 u/s 87A



Example 2
For Assessment Year 2016-17
Calculation of Income Tax in the case of an employee below the age of sixty years having a handicapped dependent (With valid PAN furnished to employer).
S.No.Particulars
Rupees
1
Gross Salary
4,20,000
2
Amount spent on treatment of a dependant, being person with
7000
disability (but not severe disability)
3
Amount paid to LIC with regard to annuity for the maintenance of
60,000
a dependant, being person with disability( but not severe
disability)
4
GPF Contribution
25,000
5
LIP Paid
10,000
6
Interest Income on Savings Account
12,000
Computation of Tax
S.No.Particulars
Rupees
1
Gross Salary
4,20,000
2
Add: Income from Other Sources
Rs 12,000
Interest Income on Savings Account
3
Gross Total Income
4,32,000
4
Less: Deduction U/s 80DD (Restricted to Rs.60,000/- only)
60,000
5
Less: Deduction U/s 80C (i) GPF Rs.25,000/-
35,000
(ii) LIP Rs.10,000/- = Rs.35,000/-
6
Less: Deduction u/s 80TTA on Interest Income on savings account
10000
(restricted to Rs 10000/-)
7
Total Income
3,27,000
8
Income Tax thereon/payable
5,700
(includes Rebate of Rs 2000 as per Section 87A)
9
Add:
(i). Education Cess @2%
114
(ii). Secondary and Higher Education Cess @1%
57
10
Total Income Tax payable
5,871
11
Rounded off to
5,870


Example 3
For Assessment Year 2016-17

Calculation of Income Tax in the case of an employee below age of sixty years where medical treatment expenditure was borne by the employer (With valid PAN furnished to employer).


S.No.Particulars
Rupees
1Gross Salary
5,20,000
2Medical Reimbursement by employer on the treatment of self and
35,000
dependent family member
3Contribution of GPF
20,000
4LIC Premium
20,000
5Repayment of House Building Advance
25,000
6Tuition fees for two children
60,000
7Investment in Unit-Linked Insurance Plan
30,000
8Interest Income on Savings Account
8,000
9Interest Income on Time Deposit
15,000

Computation of Tax
S.No.Particulars
Rupees
1Gross Salary
5,20,000
2Add: Perquisite in respect of reimbursement of Medical Expenses
20,000
In excess of Rs.15,000/- in view of Section 17(2)(v)
3Income from Other Sources
23,000
i)Interest Income on Savings Account
Rs 8,000
ii)Interest Income on Savings Account
Rs 15,000
4
Gross Total Income
5,63,000
5a.Less: Deduction U/s 80C
(i) GPFRs.20,000/-
(ii) LICRs.20,000/-
(iii) Repayment of House Building AdvanceRs.25,000/-
(iv) Tuition fees for two childrenRs.60,000/-
(v) Investment in Unit-Linked Insurance PlanRs.30,000/-
Total=Rs.1,55,000/-
Restricted to Rs. 1,58,000/-
b. Less : Deduction u/s 80TTA on Interest Income on savings
account (restricted to Rs 8000/- - available only on Savings
account interest) Rs 8000
Total deduction available Rs 1,58,000/-
1,58,000
6
Total Income
4,05,000
7Income Tax thereon/payable (after rebate u/s 87A)
15,800
8Add:
(i). Education Cess @2%
276
(ii). Secondary and Higher Education Cess @1%
138
9
Total Income Tax payable
14,214
10
Rounded off to
14,214


Example 4
For Assessment Year 2016-17

Illustrative calculation of House Rent Allowance U/s 10 (13A) in respect of residential accommodation situated in Delhi in case of an employee below the age of sixty years (With valid PAN furnished to employer).

S.No.Particulars
Rupees
1Salary
3,50,000
2Dearness Allowance
2,00,000
3House Rent Allowance
1,40,000
4House rent paid
1,44,000
5General Provident Fund
36,000
6Life Insurance Premium
4,000
7Subscription to Unit-Linked Insurance Plan
50,000

Computation of total income and tax payable thereon
S.No.Particulars
Rupees
1Salary + Dearness Allowance + House Rent Allowance
6,90,000
3,50,000+2,00,000+1,40,000 = 6,90,000
2
Total Salary Income
6,90,000
3Less: House Rent allowance exempt U/s 10(13A):
Least of:
(a). Actual amount of HRA received=
1,40,000
(b). Expenditure of rent in excess of 10% of salary
(including D.A. presuming that D.A. is taken
for retirement benefit) (1,44,000-55,000) =
89,000
(c). 50% of Salary(Basic+ DA)
=
2,75,000
89,000
Gross Total Income
6,01,000
Less: Deduction U/s 80C
(i) GPF
Rs.36,000/-
(ii) LIC
Rs. 4,000
(iii) Investment in Unit-Linked Insurance Plan
Rs.50,000/-
Total=Rs.1,14,000/-
90,000
3
Total Income
5,11,000
Tax payable
27,200
Add:
(i). Education Cess @2%
544
(ii). Secondary and Higher Education Cess @1%
272
Total Income Tax payable
28016
Rounded off to
28020


Example 5
For Assessment Year 2016-17

Illustrating valuation of perquisite and calculation of tax in the case of an employee below age of sixty years of a private company in Mumbai who was provided accommodation in a flat at concessional rate for ten months and in a hotel for two months ( With valid PAN furnished to employer).


S.No.Particulars
Rupees
1Salary
7,00,000
2Bonus
1,40,000
3Free gas, electricity, water etc. (Actual bills paid by company)
40,000
4(a)Flat at concessional rate (for ten month).
@ Rs.36000/month
3,60, 000
4(bHotel rent paid by employer (for two month)
1,00,000
4(c)Rent recovered from employee.
60,000
4(d)Cost of furniture.
2,00,000
5Subscription to Unit Linked Insurance Plan
50,000
6Life Insurance Premium
10,000
7Contribution to recognized P.F.
42,000

COMPUTATION OF TOTAL INCOME AND TAX PAID THEREON:
S.No.Particulars
Rupees
1Salary
7,00,000
2Bonus
1,40,000
3Total Salary(1+2) for Valuation of Perquisites
8,40,000
Valuation of perquisites
4(a)Perquisite for flat:
Lower of (15% of salary for 10 months=Rs.1,05,000/-)
and (actual rent paid= Rs 3,60,000) i.e. Rs. 1,05,000
4(b)Perquisite for hotel :
Lower of (24% of salary of 2 months=Rs 33,600)
and (actual payment= Rs 1,00,000) i.e. Rs
33,600
4(c)Perquisites for furniture(Rs.2,00,000) @ 10% of cost
Rs. 20,000
4(c)(i)Total of [4(a)+(b)+(c)] (1,05,000+ 33,600+ 20,000)Rs.158,600
Less: rent recovered
(-)Rs. 60,000
=
Rs. 98,600
4(d)Add
Perquisite for free gas, electricity, water etc. Rs.40,000 (+) Rs
98,600 [4(c)(i)] =Rs1,38,600
Total perquisites
1,38,600
5Gross Total Income (Rs.8,40,000+ 1,38,600)
9,78,600
6Gross Total Income
9,78,600
7Less: Deduction U/s 80C:
(i). Provident Fund (80C)
:42,000
(ii). LIC (80C)
:10,000
(iii). Subscription to Unit Linked Insurance Plan(80C) :50,000/-
Total
= 1,02,000
Restricted to Rs 1,02,000 u/s 80C
1,02,000
8Total Income
8,76,600
9Tax Payable
1,00,320
10Add:
(i). Education Cess @2%
2,006
(ii). Secondary and Higher Education Cess @1%
1,003
11Total Income Tax payable
1,03,329
12Rounded off to
1,03,330


Example 6
For Assessment Year 2016-17

Illustrating Valuation of perquisite and calculation of tax in the case of an employee below the age of 60 years of a Private Company posted at Delhi and repaying House Building Loan ( With valid PAN furnished to employer).


S.No.Particulars
Rupees
1Salary
4,00,000
2Dearness Allowance
1,00,000
3House Rent Allowance
1,80,000
4Special Duties Allowance
12,000
5Provident Fund
60,000
6LIP
10,000
7Deposit in NSC VIII issue
30,000
8Rent Paid by the employee for house hired by her
1,20,000
9Repayment of House Building Loan (Principal)
60,000
10Tuition Fees for three children (Rs.10,000 per child)
30,000

Computation of total income and tax payable thereon
S.No.Particulars
Rupees
1Gross Salary (Basic+DA+HRA+SDA)
6,92,000
Less : House rent allowance exempt U/s 10 (13A)
Least of:
(a). Actual amount of HRA received.
:Rs.1,80,000
(b). Expenditure on rent in excess of 10% of salary
(Including D.A.)assuming D.A. is included for
retirement benefits (1,20,000- 50,000)
:Rs. 70,000
(c). 50% of salary (including D.A)
: Rs. 2,50,000
70,000
2
Gross Total Taxable Income
6,22,000
Less: Deduction U/s 80C
(i).Provident Fund:
60,000
(ii).LIP:
10,000
(iii). NSC VIII Issue:
30,000
(iv). Repayment of HBA:
60,000
(v).Tuition Fees (Restricted to two children):
20,000
Total: 1,80,000
Restricted to 1,50,000
1,50,000

Total Income
4,72,000
Income Tax thereon/payable
20,200
Add:
(i). Education Cess @2%
404
(ii). Secondary and Higher Education Cess @1%
202
Total Income Tax payable
20,806
Rounded off to
20,810


Example 7
For Assessment Year 2016-17

A. Calculation of Income tax in the case of a retired employee above the age of sixty years but below the age of 80 years and having gross pension of:
iv) Rs.4,50,000/-,
v) Rs.8,00,000/- ,
vi) Rs. 12,50,000/-.

B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
Particulars
Rupees
Rupees
Rupees
(i)
(ii)
(iii)
Gross Pension
4,50,000
8,00,000
12,50,000
Contribution of P.P.F.
70,000
1,00,000
1,50,000

Computation of Total Income and tax payable thereon

Particulars
Rupees
Rupees
Rupees
(i)
(ii)
(iii)
Gross Pension
4,50,000
8,00,000
12,50,000
Less: Deduction U/s 80C
70,000
1,00,000
1,50,000
Taxable Income
3,80,000
7,00,000
11,00,000
Tax thereon (after rebate u/s 87A)
6,000
60,000
1,50,000
Add:
(i) Education Cess @ 2%.
120
1200
3000
(ii) Secondary and Higher Education Cess @1%
60
600
1500
Total tax payable
6,180
61,800
1,54,500
TDS under sec. 206AA in case where PAN is not
24,000
90,000
1,70,000
furnished by the employee



Example 8
For Assessment Year 2016-17

A. Calculation of Income tax in the case of a retired employee above the age of 80 years and having gross pension of:
i) Rs.5,00,000/-,
ii) Rs.8,00,000/- ,
iii) Rs. 12,50,000/-.

B What will be the amount of TDS in case of above employees, if PAN is not submitted by them to their DDOs/Offices:
Particulars
Rupees
Rupees
Rupees
(i)
(ii)
(iii)
Gross Pension
5,00,000
8,00,000
12,50,000
Contribution of P.P.F.
80,000
1,20,000
1,50,000

Computation of Total Income and tax payable thereon
Particulars
Rupees
Rupees
Rupees
(i)
(ii)
(iii)
Gross Pension
5,00,000
8,00,000
12,50,000
Less: Deduction U/s 80C
80,000
1,20,000
1,50,000
Taxable Income
4,20,000
6,80,000
11,00,000
Tax thereon
Nil
36,000
1,30,000
Add:
(i) Education Cess @ 2%.
720
2600
(ii) Secondary and Higher Education Cess @1%
360
1300
Total tax payable
Nil
37,080
1,33,900
B. TDS under sec. 206AA in case where PAN is
Nil
37,080
1,33,900
not furnished by the employee



Example 9 


Exemption u/s 10 (13A)
1. Mr. A, employed with XYZ Ltd. Up to 31.10.2015, received following emoluments :
S.No.
Particulars
Rupees
1.
Basic pay p.m.
13,000
2.
Bonus for the year received in July, 2015
72,000
3.
Club facility (for private use only) Expenditure by employer p.m.
700
4.
House Rent Allowance p.m.
2,800
5.
Employer’s contribution to URPF p.m. (Mr. A also made equal
1,000
contribution)
W.e.f. 01.11.2015, Mr. A joined PQR Ltd., with following pay package :
1.
Basic pay p.m.
18,000
2.
House Rent Allowance p.m.
1,600
3.
Club Facility (for private use only) Expenditure by employer p.m.
1,100
4.
Use of car for journey between office and residence – Employer’s
600
expenditure p.m.
5.
Employer’s contribution to RPF p.m. (Mr. A also made equal contribution)
2,000
Other particulars of Mr. A are as under :
1.
Mr. A resides at Amritsar paying a monthly rent of
3,500
2.
Mr. A’s income from other sources
95,000
3.
Mr. A contributed to LIC/PPR/NSC etc.
20,000
Compute Mr. A’s taxable income and tax liability for A.Y. 2016-17.


Computation of Tax
S.No.
Particulars
Rupees
1.
Income from Salary
(a) From XYZ Ltd.
Basic pay (Rs.13,000 x 7)
91,000
Bonus
7,200
Club facility (Rs.700 x 7)
Rupees
4,900
H.R.A. (Rs.2,800 x 7)
19,600
Less : Exempt u/s 10(13A)
15,400
4,200
Employer’s Contribution to U.R.P.F.
1,07,300
(b) From PQR Ltd.
Rupees
Basic pay (Rs.18,000 x 5)
90,000
H.R.A. (Rs.1,600 x 5)
8,000
Less : Exempt u/s 10(13A)
8,000
Club Facility (Rs.1,100 x 5)
5,500
Facility of Car (not taxable as perquisite)
15,400
Employer’s Contribution to R.P.F.
95,500
Gross Salary
2,02,800
Less: Deduction
-----
Net Salary
2,02,800

2.
Income from Others Sources
95,000
Gross Total Income
2,97,800
Less : Deduction u/s 80C
: Contribution to LIC/PPF/NSC
Rs. 20,000
: Contribution to RPF ( Rs.2000 x 5)
Rs. 10,000
30,000
Total Income
2,67,800
Computation of Tax Liability
Tax payable on Rs.2,67,800
1,780
Less : Rebate u/s 87A
1,780
Net Income-tax payable
Nil
Add : Surcharge
Nil
Add : EC @ 2%
---
Add : S&HEC @ 1%
---
Total Tax Payable
Nil


Example 10
2. One Computation of Taxable Salary and allowances, Deduction for Interest on Housing Loan and Deduction u/s 80C.

Mr. X, a Central Govt. Officers in Delhi, is receiving Basic Pay Rs.23,720, grade Pay Rs.7,600, DA at prescribed rates, transport allowances @ Rs.3200+DA thereon, and HRA 30% of basic pay + grade pay (though living in his own house). His date of increment is Ist July. The following are other particulars of his income. Compute his taxable income and tax payable, for A.Y.2015-16.

S.No.
Particulars
Rupees
1.
Honorarium for valuation of answer books of a departmental examination
3,000
2.
Fee for work done for a private body (1/3rd of fees has been retained by
6,000
Govt.)
3.
Contributions to G.P.F. p.m.
4,700
4.
Postal Life Insurance Premium financed from G.P.F. p.m.
280
5.
Contribution to Central Govt. Employees Group Insurance Scheme p.m.
500
6.
Life Insurance Premium (being a Life Insurance Policy of Rs.1,00,000
10,500
taken in name of his wife before 1.04.2012)
7.
Contribution to Public Provident Fund
10,000
8.
Repayment of HDFC loan borrowed after 1.04.1999 EMI Rs.25,000
3,00,000
(Towards loan Rs.95,000, towards interest Rs.2,05,000)

Computation of Tax
S.No.
Particulars
Rupees
1.
Income from Salary
Basic Pay @ Rs 23,720 p.m
(March to June ’14)
94,880
@ Rs 24,660 p.m * (July 2014 to Feb 2015)
1,97,280
2,92,160
91,200

Grade Pay @ Rs 7,600 p.m
Dearness Allowance
1.3.2014 to 30.06.2014 @ 100% i.e., Rs 31,320 p.m
1,25,280
1.7.2014 to 31.12.2014 @ 107% i.e. Rs 34,518 p.m
2,07,108
1.1.2015 to 28.02.2015 @ 113% (assumed) i.e.,
Rs. 36,454 p.m
72,908
4,05,296
House Rent Allowance
@ 30% of basic pay + grade pay
1.3.2014 to 30.06.2014 @ Rs 9,396
33,584
1.07.2014 to 28.2.2015 @ Rs 9,678
77,424
1,15,008
Transport Allowance
1.3.2014 to 30.6.2014 @ Rs 6,400 p.m
25600
1.7.2014 to 31.12.2014 @ Rs 6,624 p.m
39,744
1.1.2015 to 28.2.2015 @ Rs 6,816 p.m
13,632
78,976
Less: Exempt u/s 10(14) @ 800 p.m
9600
69,376
9,73,040
Honorarium
3,000
Fees (2/3 retained by him)
4000
Total Salary
9,80,040
Less: Standard Deduction
-
Net Salary
9,80,040
2.
Income from House Property
Self-occupied u/s 23(2)(a) deemed at nil
Less : Interest on HDFC Loan
2,00,000 (-)
2,00,000
Gross Total Income
7,80,040
Less: Deduction u/s 80 C
- GPF @ Rs 4,700/-p.m
56,400
-CGEGIS @ Rs 500/- p.m
6,000
- Life Insurance Premium
10, 500
- Repayment of HDFC Loan
95,000
- Deposit in Public Provident Fund
10,000
1,77,900
1,50,000
Restricted to a maximum of Taxable Income
6,30, 040
Computation of Tax Liability
Tax payable
51,008
Add: Surcharge
-
Add : Education Cess
1020
Total Tax Liability
52,538


See Income Tax Deduction from Salaries during FY 2015-16 AY 2016-17: Circular No. 20/2015



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