Monday, 30 May 2016

Settlement of the long pending issues and appropriate recommendations on 7th CPC related matters: AICCEA

Settlement of the long pending issues and appropriate recommendations on 7th CPC related matters: AICCEA
All India Civil Accounts Employees Association
(RECOGNISED BY GOVT. OF INDIA)
CENTRAL HEADQUARTER: NEW DELHI
All India Civil Accounts Employees Association Category -II
CENTRAL HEADQUARTERS: COCHIN
Zonal Accounts Office, CBDT,
Sanjuan Towers, Old Railway Station Road Cochin- 682018

No: AICAEA/HQ/A-2/2016/ 517-558
Dated: 27th May, 2016
To,
Shri M.J.Joseph,
Controller General of Accounts,
Ministry of Finance,
Department of Expenditure,
Loknayak Bhawan,
Khan Market,
New Delhi - 110003

Subject: - Settlement of the long pending issues and appropriate recommendations on 7th CPC related matters- regarding

Sir,
We have been directed to refer our letter No: AICAEA/HQ/A-2/2016/417 dated 17th April, 2016 on the subject mentioned above and state that the employees are totally aggrieved for non-settlement of their grievances for more than one and a half years.

Moreover, large numbers of the issues that were discussed in the meeting held between the official side of CGA office and the National Executive of All India Civil Accounts employees Association under your Chairpersonship on 6th November 2015 are yet to be settled. Further, it was stated in the said meeting that the “Ministry of Finance, Department of Expenditure has returned the Cadre Review proposal of Group ‘B’ & ‘C’ cadres of CCAS with the remarks that proposal may be re-examined in terms of instructions contained in their O.M. NO. 5(3)/E.III/97 dated 07.01.1999 and No. 7(1)/E.Coord/2014 dated 29.10.2014. DoE has also informed that the revision of pay in respect of Civil Accounts Employees will not be done in isolation and the same may be viewed and examined in the larger context of Organized Accounts Service as a whole. Therefore, the matter will be examined by DoE, MoF, in a holistic manner keeping in view the recommendations of 7th Pay Commission as well. The Association was therefore asked to wait for the 7th Pay Commission recommendation and the decision of the Government.”

But, we would like to bring the following facts to your kind information -

1. Pending implementation of 7CPC recommendations, the Ministry of Finance has accorded approval to the Cadre Review proposals of the Department of Posts.

2. The C&AG has made his recommendations to the Government for cadre review/ cadre restructuring/ amendments in the Recruitment Rules.

Hence, in view of these facts and as per the DOPT instructions, cadre review of the Gr. B & C employees of Civil Accounts Employees, which should have been done much earlier and before the cadre review of the Gr “A” cadres of Civil Accounts organization was done in 2012-13, needs to be initiated immediately in consultation with the Associations.

Apart from the above, the employees and officers of Civil Accounts organization are yet to learn about the recommendations given by the Controller General of Accounts to the Empowered Committee constituted by the Government for implementing the recommendations of 7CPC.

Therefore, for the purpose of review of the status of the issues discussed on 6th November 20159 (including the issue of Cadre Review) and to be appraised about the recommendations given by the Controller General of Accounts to the Empowered Committee constituted, our National Executive Members wish to meet you on 10th June 2016. We shall be thankful if you kindly accept our proposal and make it convenient to meet us on the proposed date. Time of the meeting may kindly be intimated to us at an early date please.

It may kindly be noted that the issues for discussion in the meeting will be the items forwarded by us through our letter dated 17th April, 2016.

Thanking you,
Yours faithfully
(G.K.Nair)
Secretary General
All India Civil Accounts Employees Category II     (V.Bhattacharjee)
Secretary General
All India Civil Accounts Employees Association
Copy to
1. Secretary General. All India Associations of Pay and Accounts Officers (Civil), Mumbai.
2. All Federal Executive members of National Federation of Civil Accounts Associations
***

All India Civil Accounts Employees Association
(RECOGNISED BY GOVT. OF INDIA)
CENTRAL HEADQUARTER: NEW DELHI
All India Civil Accounts Employees Association Category -II
CENTRAL HEADQUARTERS: COCHIN
Zonal Accounts Office, CBDT,
Sanjuan Towers, Old Railway Station Road Cochin- 682018
Phone No. 011-23345070, Mob. No. 9868520926 e-mail:- v.aicaea@gmail.com
Central Office: -
16-A, Akbar Road Hutments,
New Delhi: - 110011

Address for Communication:-
17/2 – C, P & T Quarters,
Kali Bari Marg,
New Delhi-110001
No: AICAEA/HQ/A-2/2016/417
Dated: 17th April, 2016

To,
Shri M.J.Joseph,
Controller General of Accounts,
Ministry of Finance,
Department of Expenditure,
Loknayak Bhawan,
Khan Market,
New Delhi - 110003

Subject: - Settlement of the long pending issues and appropriate recommendations on 7th CPC related matters- regarding

Sir,
We have been directed to refer the letters No; AICAEA/HQ/A-2/2016/ 229-59 dated 09.03.2016 and No: - AICAEA/HQ/A-2/2016/ 271 dated: 10.03.2016 of All India Civil Accounts Employees Association and its subsequent letters dated 31.03.2016, 01.04.2016, 08.04.2016 and 12.04.2016 respectively on the subject mentioned above and state that the opportunities of career advancement of different categories of Civil Accounts employees has been halted as no departmental examination was conducted by the Civil Accounts authorities for last one and a half years. Non-conducting of AAO(Civil) examination from the year 2014 onwards alone has virtually created chain linked adverse affect on totality of the Civil Accounts Employees right from MTS to AAO. None of the categories have been getting their legitimately due benefits of promotion and financial upgradations etc. We have already requested to your good self through our earlier correspondences to kindly conduct the examinations at the earliest so that the grievances of the employees in general are resolved.

Apart from the above, we would also like to state that-

1. Among the items discussed in the meeting held between the official side and the National Executives of the All India Civil Accounts Employees Association under your Chairpersonship on 6th November 2015, though favourable actions on some of the issues have been taken, but majority of the issues are yet to be settled which has generated strong resentment among the employees.

2. Endeavour on the part of the office of the Controller General of Accounts to operate a transfer policy for AAOs and local rotational transfer policies for AAO and Accountant/ Senior Accountant transparently were no doubt tremendously appreciated by the employees. But, the employees are totally disappointed due to the fact that, while these policies have been totally diluted and vitiated on account of prejudiced and biased approaches of the heads of Civil Accounts Departments like PCCAs of MHA, CBEC, CBDT, CCA of Ministry of Urban Development and CA of Ministry of WR etc. and also for their unwanted interferences, the Controller General of Accounts is maintaining total indifference against all these and his office is not at all enforcing the policies effectively and uniformly.

Further, due to sustained and united movements of the Central Government Employees, the Government of India has constituted the Empowered Committee under the Chairpersonship of the Cabinet Secretary to Government of India for sorting out the grievances of the employees on the recommendations of 7 CPC. In terms of the directives of the Empowered Committee, the All India Civil Accounts Employees Association alone was asked by your office to make its submission on the 7th CPC related issues. The Association had accordingly submitted its proposals for improvements in recommendations and it was informally informed to the Association that the proposals have been forwarded to the appropriate higher authorities with proper recommendations. Though the Association offered it’s thanks to your office for the favourable action taken but unfortunately, the requests for (1) Providing a copy of the recommendations made and (2) Meeting the joint delegation of All India Civil Accounts Employees Association, All India Civil Accounts Employees Association Category II and All India Association of Pay and Accounts Officers (Civil) on the CPC related matters are yet to be responded by your office.

We hope your kind self would definitely agree with us that the employees are suffering without any fault of theirs and there are valid grounds for them to become restive. Therefore, the specific issues on which the resentment has been precipitated and in support of which issues the members of our Associations shall resort to a day’s protest Dharna on 6th May 2016 are attached herewith in the form of “CHARTER OF DEMANDS” for your kind perusal.

We on behalf the All India Civil Accounts Employees Associations and All India Civil Accounts Employees Association Category II earnestly request you to kindly intervene personally into the undesirable situation created so that grievances of the employees are resolved at the earliest and peace and tranquility prevail in the organization.
Thanking you,
Yours faithfully
Enclo as above
(G.K.Nair)
Secretary General
All India Civil Accounts Employees Category II    (V.Bhattacharjee)
Secretary General
All India Civil Accounts Employees Association

 CHARTER OF DEMANDS

1. Conducting the AAO (Civil) Examination immediately.

2. Issuing of orders for posting of all candidates qualified AAO (Civil) examination, 2014

3. Granting promotions to the Senior Accountants as AAOs who are eligible for promotion under 10% promotion quota.

4. Issuing orders for transfer of the AAOs completed their tenure posting period and awaiting posting to their choice stations.

5. Cancellation of the decision of CGA office to bring persons from other departments/ organizations as AAOs on deputation basis and grant adhoc promotions to the eligible persons of Civil Accounts organization itself in case vacancies exist after issuing orders for promotion to the persons discussed in Sl. No. (1) and (2) above

6. Giving appropriate recommendations to Cabinet Secretary on 7CPC related matters after convening meeting with the combined delegation of All India Civil Accounts Employees Association, All India Civil Accounts Employees Association Category II and All India Association of Pay and Accounts Officers (Civil).

7. Settlement of following pending issues discussed in the formal meeting held on 6th November 2015:-
(i) Adoption of mutually agreed transfer policy for AAOs and implementation of the existing policy transparently without any discrimination.
(ii) Counting of service for Grant of benefit of II ACP to Sr. Accountant appointed as Accountant–
(a)From the date passing departmental competitive examination conducted by SSC
(b)From the 1st July of the next year of passing open examination conducted by SSC as per orders of DoPT and MHA.
(iii) Grant of Pay Scale of Rs. 1350-2200 from 01.01.86 to DEOs as has been granted by the Defence Accounts Department as well as in terms of the CAT judgments.
(iv) Removal of injustice to newly recruited Accountant in the matter of granting 1st increment through rectification of the procedure of Departmental Confirmatory test and also imparting training to the candidates.
(v) Grant of two financial up gradation to MTS under ACP scheme who had completed 24 years of service before implementation of MACP Scheme as has been done by the O/o the Pr. Of Audit and Director, Economic service Ministries, Delhi vide order No:- AMG.I/Admn-1/32 dated 24.06.2014.
(vi) (a) Grant of Headquarter allowance to Sr.PS/PS/Stenos posted in office of CGA.
(b) Improvements in promotional avenues of secretarial assistance through creation of posts and promotion of eligible persons working in Civil Accounts organization.
(vii) Removal of anomaly in grade pay arisen in PAO, CRPF after amalgamation of the office in Civil Accounts Organization.
(viii) Relaxation for revision of option for fixation of pay in the revised pay structure for persons promoted to the grade of Asstt. Accounts Officer (AAO) after 01.01.2006.
(ix) Grant of honorarium for checking of pay fixation cases and pension cases after implementation of 6th CPC recommendations.
(x) Provision of alternative accommodation and amenities to the Central Office of AICAEA.
*****

Source: http://nfcaahqnd.blogspot.in/2016/05/all-indiacivil-accounts-employees.html

Comparison of 7th Pay Commission and 6th CPC Pay excluding HRA – NFIR

NFIR has compared 7th Pay Commission pay and 6th CPC pay excluding revision in HRA. It has concluded that at lower levels only marginal increase in pay has been provided by 7th Pay Commission and that for certain levels no increase or negative increase in pay has been recommended by 7th Pay Commission

Comparison of 7th Pay Commission and 6th CPC Pay excluding HRA – NFIR provides data that shows that increase in pay by way of revision pay proposed by 7th pay commission from the Level 1 to 6 is marginal and from Level 7 there is no increase

During  discussions  with the Hon’ble  MR and the Board (CRB,  FC,  MS) on 23rd December 2015, the NFIR  General Secretary  has expressed that there is all-round  unhappiness on 7th CPC recommendations as in many cases the ‘Take  Home Pay’  is either very marginal  or less than  what  is  received  by the  employee  now.

The  Federation  also  disputed  the estimated financial  implications  (Rs.28,500 crores)  and said that the estimated  expenditure  has been exaggerated.  It was also brought to the notice of the MR the retrograde recommendations  of 7th CPC,  while the case of Railway employees  of various categories  was not dealt adequately and the Railway  Ministry  has unfortunately  not apprised the inadequacies of Grades Pay and Pay Band of 6th CPC to the Chairman,  7th CPC.

TableII  indicates  6th  CPC minimum pay in GP+  Pay Band without  HRA.

Table-II  (a)  gives 7th CPC  minimum  pay  without   HRA  (staff  in occupation   of Railway quarters are not entitled for HRA).

[A comparison  of Table-II with Table-II (a) shows minus  ‘Take  Home Pay’   for employees of Level- I  to Level-6 of Pay Matrix and equally  marginal  increase to those  in Level-7,  8 & 9 of Pay Matrix. Again  in Level- 10 the ‘Take  Home  Pay’  will be less than the present amount. Overall position  will be either “minus” or “marginal increase”.  The Income Tax deduction would further worsen.]

TABLE- II VI th CPC pay at the minimum of the Pay bands without HRA as on 01/01/2016
Pay Band
GP
PAY
DA
HRA
TR/ALL
GROSS
PF
PTAX
CGIS
DED
NET
PB-I
5200-20200
1800
7000
8750
0
1350
17100
840
150
30
1020
16080
PB-I
5200-20200
1900
7730
9663
0
1350
20643
928
200
30
1158
19485
PB-1
5200-20200
2000
8460
10575
0
3600
24635
1015
200
30
1245
23390
PB-I
5200-20200
2400
9910
12388
0
3600
28298
1189
200
30
1419
26878
PB-I
5200-20200
2800
11360
14200
0
3600
31960
1363
200
30
1593
30367
PB-11
9300-34800
4200
13500
16875
0
3600
33975
1620
,200
30
1850
32125
PB-Il
9300-34800
.   4600
17140
21425
0
3600
42165
2057
200
30
2287
39878
PB-Il
9300-34800
4800
18150
22688
0
3600
44438
2178
200
60
2438
42000
PB-Il
9300-34800
5400
20280
25350
0
7200
52830
2434
200
60
2694
50136
PB-Ill
15600-39100
5400
21000
26250
0
7200
54450
2520
200
120
2840
51610
PB-I11
15600-39100
6600
25350
31688
0
7200
64238
3042
200
120
3362
60876
PB-111
15600-39100
7600
29500
36875
0
7200
73575
3540
200
120
3860
69715
TABLE-II (a) VII th CPC pay at the minimum of the level without HRA as on 01/01/2016
LEVEL
PAY
DA
HRA
TR/ALL
GROSS
PF
PTAX
CGIS
DED
NET
GROSS DIFF
NET DIFF
1
18000
0
0
1350
19350
2160
200
1500
3860
15490
2250
-590
2
19900
0
0
1350
21250
2388
200
1500
4088
17162
608
-2323
3
21700
0
0
3600
25300
2604
200
1500
4304
20996
665
-2394
4
25500
0
0
3600
29100
3060
200
1500
4760
24340
803
-2538
5
29200
0
0
3600
32800
3504
200
1500
5204
27596
840
-2771
6
35400
0
0
3600
39000
4248
200
2500
6948
32052
5025
-73
7
44900
0
0
3600
48500
5388
200
2500
8088
40412
6335
534
8
47600
0
0
3600
51200
5712
200
2500
8412
42788
6763
789
9
53100
0
0
7200
60300
6372
200
2500
9072
51228
7470
1092
10
56100
0
0
7200
63300
6732
200
5000
11932
51368
8850
-242
11
67700 –
0
0
7200
74900
8124
200
5000
13324
61576
10663
700
12
78800
0
0
7200
–   86000
9456
200
5000
14656
71344
12425
1629

Source: NFIR

NFIR compares 7th pay commission pay matrix and 6th pay commission pay

NFIR compares 7th pay commission pay matrix and 6th pay commission pay

NFIR compares 7th pay commission pay matrix and 6th pay commission pay including HRA – NFIR concludes that net benefit is marginal at Level-1, and minus  at Level–2. When taking income tax deduction in to account pay increase at higher levels will also be minimal During  discussions  with the Hon’ble  MR and the Board (CRB,  FC,  MS) on …

NFIR compares 7th pay commission pay matrix and 6th pay commission pay including HRA – NFIR concludes that net benefit is marginal at Level-1, and minus  at Level–2. When taking income tax deduction in to account pay increase at higher levels will also be minimal

During  discussions  with the Hon’ble  MR and the Board (CRB,  FC,  MS) on 23rd December 2015, the NFIR  General Secretary  has expressed that there is all-round  unhappiness on 7th CPC recommendations as in many cases the ‘Take  Home Pay’  is either very marginal  or less than  what  is  received  by the  employee  now.

The  Federation  also  disputed  the estimated financial  implications  (Rs.28,500 crores)  and said that the estimated  expenditure  has been exaggerated.  It was also brought to the notice of the MR the retrograde recommendations  of 7th CPC,  while the case of Railway employees  of various categories  was not dealt adequately and the Railway  Ministry  has unfortunately  not apprised the inadequacies of Grades Pay and Pay Band of 6th CPC to the Chairman,  7th CPC.

As  desired  vide  note  dated  23/12/2015,  the  Federation   furnishes  the  following  details  as Annexures to this letter.

(a) Table I   gives   the  position   of  6th   CPC   minimum   pay   in  Pay  Band   &  Grade   Pay (PB-I   to PB-3) as on 01/01/2016.

(b) Table-I  (a) explains  the 7th CPC minimum pay from Level-1 to Level-12  of the Pay Matrix . A comparison  of Table-I  with Table-I (a)  reveals that the net benefit is marginal at Level-1, minus  at Level2.

However,  there  may be substantial  increase   from Level- 7  and above.  If Income Tax deduction  takes place, the increase will fall.


6th And 7th CPC Pay Comparison Table
TABLE-1                                               VI th CPC pay at the minimum of the Pay bands as on 01/01/2016
GP PAY DA HRA TR/ALL GROSS PF PTAX CGIS DED NET
PB-I 5200-20200 1800 7000 8750 2100 1350 19200 840 150 30 1020 18180
PB-I 5200-20200 1900 7730 9663 2319 1350 21062 928 200 30 1158 19904
PB-I 5200-20200 2000 8460 10575 2538 3600 25173 1015 200 30 1245 23928
PB-1 5200-20200 2400 9910 12388 2973 3600 28871 1189 200 30 1419 27451
PB-II 9300-34800 4200 13500 16875 4050 3600 38025 1620 200 30 1850 36175
PB-II 9300-34800 4600 17140 21425 5142 3600 47307 2057 200 30 2287 45020
PB-II 9300-34800 4800 18150 22688 5445 3600 49883 2178 200 60 2438 47445
PB-II 9300-34800 5400 20280 25350 6084 7200 58914 2434 200 60 2694 56220
PB-III 15600-39100 5400 21000 26250 6300 7200 60750 2520 200 120 2840 57910
PB-III 15600-39100 6600 25350 31688 7605 7200 71843 3042 200 120 3362 68481
PB-III 15600-39100 7600 29500 36875 8850 7200 82425 3540 200 120 3860 78565
TABLE-
(a)            VII th CPC pay at the minimum of the Pay Matrix level as on 01/01/2016
LEVEL I PAY DA HRA TR/ALL GROSS PF PTAX CGIS DED NET GROSS DIFF NET DIFF
1 18000 0 4320 1350 23670 2160 200 1500 3860 19810 4470 1630
2 19900 0 4776 1350 26026 2388 200 1500 4088 21938 2715 -216
3 21700 0 5208 3600 30508 2604 200 1500 4304 26204 5335 2276
4 25500 0 6120 3600 35220 3060 200 1500 4760 30460 6350 3009
5 29200 0 7008 3600 39808 3504 200 1500 5204 34604 7240 3629
6 35400 0 8496 3600 47496 4248 200 2500 6948 40548 9471 4373
7 44900 0 10776 3600 59276 5388 200 2500 8088 51188 11969 6168
8 47600 0 11424 3600 62624 5712 200 2500 8412 54212 12742 6768
9 53100 0 12744 7200 73044 6372 200 2500 9072 63972 14130 7752
10 56100 0 13464 7200 76764 6732 200 5000 11932 64832 16014 6922
11 67700 0 16248 7200 91148 8124 200 5000 13324 77824 19306 9344
12 78800 0 18912 7200 104912 9456 200 5000 14656 90256 22487 11691

Source: NFIR

7th Pay Commission award, central government employees to get richer

7th Pay Commission award, central government employees to get richer

Central-Government-Employees-Get-Richer-7CPC


Central government employees will be richer in the coming months with the government planning to spend Rs 1.02 lakh crore on its employees.

The Empowered Committee of Secretaries on the 7th Pay Commission will make revision in the pay scales of the central government employees.

Although 48 lakh strong workforce and 52 lakh pensioner of central government come under the purview of 7th pay commission but the government doesn’t hesitate to give pay in hike to its employees.
The Empowered Committee of Secretaries will be making revision in the pay scale on June 11 on the inputs Implementation cell.

Implementation cell hold a series of discussions and meetings with the employees’ unions, which brought a motion to compel the Empowered Committee of Secretaries to decide to propose a minimum salary at Rs 21,000 and the highest salary at Rs 2,70,000.

Each of the central government employees- from low paid employees to high ranking official- will get a salary hike of around 25 per cent to 30 per cent from January 2016, a Finance Ministry official said on Friday asked not to be named because he was not authorized to release the information.

The 7th Pay Commission’s recommendations that would put an additional burden of Rs 1.02 lakh crore on the exchequer. “But government is ready to spend that much on its employees,” he added.

The Central Government Employees’ Confederation also pressed that 7th Pay Commission recommendations should be implemented immediately with necessary amendments.

Accordingly, the Empowered Committee of Secretaries on the 7th Pay Commission is expected to submit its report soon to Finance Minister Arun Jaitley for cabinet nod.

The 7th Pay Commission by headed Justice A K Mathur had recommended the minimum salary for central government employees at Rs 18,000 and maximum salary at Rs 2,50,000.

The pay commission submitted its report to Finance Minister Arun Jaitley on November 19 last year.
After that, the government formed a secretary-level Empowered Committee headed by Cabinet Secretary P K Sinha to review the pay panel’s recommendations and an Implementation Cell has also been created in the Finance Ministry which works as the Secretariat of the Empowered Committee of Secretaries.

The government will make the announcement of 7th Pay Commission award soon after reviewing the Empowered Committee of Secretaries’ report on the remuneration of central government employees.

TST

Grant of Interim Relief to West Bengal State government employees amounting to 10 percent of their band pay


Grant of Interim Relief to West Bengal State Government Employees Amounting to 10 % of their Band Pay.

After coming to power for the second time, the Mamata Banerjee led government on Friday announced a grant of interim relief to state government employees amounting to 10 percent of their band pay.

"In our first cabinet meeting, we have decided to provide a grant of interim relief to state government employees amounting to ten percent of the band pay drawn by them," said state Finance Minister Amit Mitra.

"This will be effective from July and will cover state employees, teachers, local government employees and pensioners," he said.

"The interim relief is small in nature but the net impact to the state exchequer will be around Rs.3,000 crore," said Banerjee.

The difference in dearness allowance for state employees compared to their central counterparts stands at 50 percent.

Banerjee had announced a 10 percent hike in dearness allowance for the state employees from January reducing the difference to 44 percent. Later in March, the centre hiked the allowance by another six percent.
The government in its first stint had announced the Sixth Pay Commission to review the pay structure of state government employees.

No TDS on Disability Pension to Armed Forces Personnel

No TDS on Disability Pension to Armed Forces Personnel
By Prashant Thakur -February 3, 2016

The tax exemption of disability pension received by Armed Force Personnel are among those exemptions under Income Tax Act for which you may not get a direct reference in the Income Tax Act.

However , such tax exemption are allowed by the executive instruction issued by either Finance Ministry notification or under the delegated powers to CBDT . Armed Forces personnel get the disability pension which is basically aggregate of two components-disability pension and service pension. Previously , this website had posted earlier 3 Types of Pension to Armed Forces Completely Tax Free!

Disability Pension to Armed Forces : What is it ? Update :

The below portion is modified as the government, has issued new circular for minimum disability pension .

The circular is applicable to all Pre-2006 Armed Forces Disability/War Injury Pensioners who were/ are in receipt of Disability Pension/ Liberalized Disability Pension/ War Injury Pension as on 24th September 2012.

Download the Circular 542 dated 27/05/2015

As per the website of Principal Controller of Defence Accounts (Pension), where an Armed Forces Personnel is invalided out of service, which is accepted as attributable to or aggravated by military service, he shall be entitled to disability pension consisting of Service Element & Disability Element as follows:-

Service Element The amount of service element shall be determined as 50% of less emoluments drawn as given in para 6 of MOD letter dt- 12.11.2008 which is subject to minimum Rs 3500/- p.m.

Disability Element The rates of disability elements for 100% disability for various ranks shall be 30% of emolument last drawn subject to Rs. 3510/- per month. Disability lower than 100% shall be computed by reducing proportionately.

Disability Element on Invalidment Where an Armed Force personnel is invalided out of service under circumstances mentioned in para 4.1 of Govt. letter dt. 31.01.01, the extent of disability shall be determined as follows for the purpose of computing the DE :- Percentage as finally assessed by Competent AuthorityPercentage to be reckoned for computing DE Between 1 to 4950 Between 50 & 7575 Between 76 &100100 Disability Element on Retirement/Discharge Where an Armed Forces personnel is retained in service despite disability and subsequently retired/ discharged on completion of tenure or on attaining the age of retirement, he shall be entitled to Disability Entitlement at the rate prescribed for 100% disablement. For disablement less than 100% but not below 20%, the rates shall be reduced proportionately.
No disability element shall be payable for disability less than 20% .

Is Disability Pension to Armed Forces Tax Free ?

Yes, although there is nothing in section 10 of the Income Tax Act , which is a general exemption section under Income tax Act , the disability pension has been made tax free through Finance Ministry notification No 878-F (Income Tax) dated 21-3-1922 .

The following instruction from CBDT explains that the entire disability pension is exempt

INSTRUCTION NO 136F.NO. 34/3/68-IT(AI)GOVT OF INDIA CENTRAL BOARD OF DIRECT TAXES NEW DELHI, DATED THE 14TH JAN 1970
FROM :SHRI S N NAUTIALSECRETARY, CBDT

TO:ALL COMMISSIONERS OF INCOME TAX

SUBJECT : EXEMPTION – SERVICE AND DISABILITY ELEMENT OF DISABILITY PENSION GRANTED TO A DISABLED OFFICER OF THE INDIAN ARMY –

WHETHER EXEMPTED FROM INCOME TAX. REFERENCE IS INVITED TO THE BOARD’S LETTER F NO 42/9/59-IT(AI), DATED THE 5TH SEPT 1960 ON THE ABOVE SUBJECT WHEREIN IT WAS MENTIONED THAT IN THE CASES FALLING UNDER ITEM (29) OF FINANCE DEPTT NOTIFICATION NO 878-F (INCOME TAX) DATED 21-3-1922, THE‘DISABILITY ELEMENT’ OF THE DISABILITY PENSION RECEIVED BY AN OFFICER OF THE ARMY WILL ONLY BE EXEMPTED FROM TAX AND THAT THE ‘SERVICE ELEMENT’ WILL BE SUBJECTED TO TAX.

2. ON RECONSIDERATION OF THE MATTER, IN CONSULTATION WITH THE MINISTRY OF LAW, THE BOARD ARE ADVISED THAT ITEM 29 OF THE NOTIFICATION DOES NOT DIFFERENTIATE BETWEEN TYPES OF PENSIONS. ACCORDINGLY IN THE CASES FALLING UNDER ITEM 29 OF THE ABOVE NOTIFICATION, ENTIRE DISABILITY PENSION WILL BE EXEMPTED FROM INCOME-TAX.

3.THE ABOVE INSTRUCTIONS MAY BE BROUGHT TO THE NOTICE OF ALL ASSESSING OFFICERS IN YOUR CHARGE. YOURS FAITHFULLY,

SD/- (S N NAUTIAL) SECRETARY ,CBDT

Confusion on Exemption Disability Pension & Service Element As the disability pension is aggregate of two elements- disability element and service element- a confusion was created in filed formation of tax authorities , whether the disability element only is tax free and not the service element. CBDT , therefore , in order to wipe out any confusion , issued another instruction

F. No. 200/51/00-ITA-1 dt. 02.7.2001 to stress that both element of disability pension is tax exempt.
Read the instruction below :

[F. NO. 200/51/00-ITA-1 DT. 02.7.2001 FROM MINISTRY OF FINANCE DEPTT. OF REVENUE CENTRAL BOARD OF DIRECT TAXES, NEW DELHI.]

SUBJECT: EXEMPTION FROM INCOME TAX TO DISABILITY PENSION, I.E. ” DISABILITY ELEMENT” AND “SERVICE ELEMENT” OF A DISABLED OFFICER OF THE INDIAN ARMED FORCES- INSTRUCTIONS REGARDING.

REFERENCE HAVE BEEN RECEIVED IN THE BOARD REGARDING EXEMPTION FROM INCOME TAX TO DISABILITY PENSION, I.E. “DISABILITY ELEMENT” AND “SERVICE ELEMENT” OF A DISABLED OFFICER OF THE INDIAN ARMED FORCES.

2. IT APPEARS THAT FIELD FORMATIONS IN CERTAIN CASES ARE NOT UNIFORMLY ALLOWING DISABILITY, PENSION IN SPITE OF BOARD’S INSTRUCTION NO.136 DATED 14TH JANUARY, 970 (F.NO.34/3/68-IT(A.1)).

3. THE MATTER HAS BEEN RE-EXAMINED IN THE BOARD AND IT HAS BEEN DECIDED TO REITERATE THAT THE ENTIRE DISABILITY PENSION, I.E. ” DISABILITY ELEMENT” AND “SERVICE ELEMENT” OF A DISABLED OFFICER OF THE INDIAN ARMED FORCES CONTINUES TO BE EXEMPT FROM INCOME TAX.

4. THIS MAY BE BOUGHT TO THE NOTICE OF ALL THE OFFICERS WORKING UNDER YOU.
SD/- B.L. SAHU OFFICER ON SPECIAL DUTY (ITA .1)

No TDS on Disability Pension to Army Personnel
As it happens in India, everyone becomes the super authorities against the common man. The government received complaint that certain banks are deducting the tax on the disability pension .

So , government issued a press release that no TDS is required on the said disability pension paid to Armed Forces personnel.
Read below the excerpt. PRESS RELEASE, DATED 20-12-2007

IT HAS BEEN REPORTED IN THE PRESS THAT SOME BANKS WERE DEDUCTING TAX FROM PENSION OF DISABLED EX-SERVICEMEN IN VIOLATION OF GOVERNMENT INSTRUCTIONS.

RBI WAS REQUESTED TO HAVE THE MATTER INVESTIGATED AND REMEDIAL ACTION TAKEN. AFTER EXAMINATION, RBI DISCOVERED THAT IN ONE SPECIFIC INSTANCE, DUE TO OVERSIGHT, THE PENSIONER’S DISABILITY PENSION WAS WRONGLY TAKEN INTO ACCOUNT WHILE CALCULATING INCOME-TAX.

RBI HAS ISSUED INSTRUCTIONS TO ALL AGENCY BANKS TO STRICTLY ADHERE TO THE PROVISIONS OF PARA 88.3 OF DEFENCE PENSION PAYMENT INSTRUCTIONS, 2005, REGARDING EXEMPTION OF INCOME-TAX OF THE DISABILITY PENSION OF THE PENSIONERS OF ARMED FORCES.

BANKS HAVE BEEN ADVISED TO ISSUE SUITABLE INSTRUCTIONS TO ALL THEIR PENSION DISBURSING BRANCHES THAT INCOME-TAX SHOULD NOT BE DEDUCTED FROM THE DISABILITY PENSION PAID TO THE PENSIONERS OF THE ARMED FORCES.

Conclusion
The disability pension given to Armed Forces Personnel are having two components-disability element & service element. Both are tax free vide Ministry of Finance notification read with clarification from CBDT and also there can not eb any TDS as the amount is fully tax free.

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