7th Pay Commission: Higher allowances to be proposed in this month
New Delhi: The Committee on Allowances will propose to increase allowances of central government employees, besides dearness allowance (DA) in this month.
DA is being paid to them with their pay packages.
The Committee on Allowances, under Finance Secretary Ashok Lavasa, was formed in July 2016 following protests by government employees over recommendations of the 7th Pay Commission on allowances.
The 7th Pay Commission had recommended of abolishing 51 allowances and subsuming 37 others out of 196 allowances.
The committee was initially given four months time to submit the report to Finance Minister Arun Jaitley.
Later, the Finance Minister extended the deadline for report submission to February 22, 2017.
The Committee on Allowances is yet to submit its report, the Minister of State for Finance Arjun Ram Meghwal said in Lok Sabha on March 10.
However, he said that the deliberations of the committee are in the final stages.
Besides the basic salary, a large portion of a central government employee’s salary is the house rent allowance (HRA); some changes are to be made in this category of the recommendations of the 7th Pay Commission on allowances,
“The Committee on Allowances has decided against reducing the house rent allowance (HRA). The 7th Pay Commission suggested bringing down the HRA to 24 per cent, 16 per cent and 8 per cent respectively depending on type of cities,” the Finance Ministry’s officials said.
The officials also said that the Committee on Allowances would suggest, the HRA is to be kept as it was under the Sixth Pay Commission at 30 per cent, 20 per cent, and 10 per cent respectively.
The Committee on Allowances is likely to remain constant the Transport Allowance for central government employees as 6th Pay Commission recommendations including Dearness Allowance(DA), the sources added.
So, the employees now get all allowances except dearness allowance, according to the 6th Pay Commission recommendations until issuing of higher allowances notification.
The higher allowances most probably to implement from the month of April and the cabinet may give its nod in this month, the sources confirmed.
Admissibility of HRA in the event of non-acceptance/surrender of Railway residential accommodation.
GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
New Delhi, dated 16.03.2017
The General Managers(P)/CAOs,
All Indian Railways
and Production Units ect.
Sub: Admissibility of HRA in the event of non-acceptance/surrender of Railway residential accommodation.
A reference from North Western Railway was received for clarification on the issue of admissibility of HRA in the event of non-acceptance/surrender of railway residential accommodation by a railway employee. The matter was examined and considered in this office in the light of policy guidelines n the issue in consultation with the Finance Directorate of Railway Board. In this connection, it is stated that the provisions of letter No.E(P&A)II-87/HRA-15 dated 16.05.1988 still hold good regarding admissibility of House Rent Allowance (HRA) in the event of non-acceptance/surrender of Railway residential accommodation. However, refused by a Railway servant of a quarter of a different class from that for which he is eligible shall not constitute refusal for the purpose of these orders unless he has the option to apply for accommodation of a class next below the one to which he is entitled by virture of his emoluments and he refuses such accommodation when allotted on the basis of his application.
2. This issues with the concurrence of the Finance Directorate of the Mininstry of Railways.
Service personnel are authorized to HRA, CILQ and FAA
Service personnel are authorized to House Rent Allowance (HRA) / Compensation in Lieu of Quarter (CILQ) / Family Accommodation Allowance (FAA)
Accommodation facilities to Officers
Government has sanctioned construction of 1,76,065 Dwelling Units (DUs) for the Married Army officers / soldiers. Apart from construction of DUs, hiring of houses is also undertaken for Defence personnel to meet the deficiency of housing. In addition, Service personnel are authorized to House Rent Allowance (HRA) / Compensation in Lieu of Quarter (CILQ) / Family Accommodation Allowance (FAA).
Married Accommodation Project was approved in 2002 for providing approximately 2 lakh Dwelling Units (DUs) to serving defence personnel. Under this project DUs with improved specifications are being constructed. Besides, under Annual Major Works Programme (AMWP) residential accommodation projects are undertaken as per special needs from time to time.
47383 DUs of Phase-I completed. Out of 58250 DUs meant for Phase-II, 27268 DUs constructed & balance 30982 DUs are under construction. 70432 DUs are planned for Phase-III projects.
This information was given by Minister of State for Defence Dr. Subhash Bhamre in a written reply to Shri Kunwar Pushpendra Singh Chandel in Lok Sabha today.
Information on House Rent Allowance – CGDA
Office of the CGDA, Ulan Batar Road, Palam, Delhi Cantt – 10
All PCsDA/PCA (Fys)/PIFAs
(Through CGDA Website)
Subject: Information on House Rent Allowance-regarding.
Please find enclosed copy of Min. of Defence, Deptt. of Expenditures, ID No.11-1/2016-IC/Pt.II dated 23.02.2017 on the subject received through MoD/D (Civ-I).
- Ministry in their ID has stated that the committee on Allowances headed by the Finance Secretary and Secretary (Expenditure) has desired that the information relating to occupancy of Govt. Accommodation and the officers/officials HRA (not allotted Govt. accommodation) may be obtained.
- The information in the following format has been sought for by the Ministry.
|Group||Total number of employees||Number of Officers/Officials residing in Government accommodation||Number of Officers/Officials drawing HRA|
- It is therefore, requested that the information on the format in respect of officers and staff working in your organization (including sub offices under your jurisdiction) may please be furnished on the E-mail anIII.email@example.com by 03.03.2017 to enable their HQrs. Office to render the compiled report to the Ministry.
Please accord top most priority.
Retention of the rates of HRA and date of effect of allowances should be from 1st January 2016 and revision of rates of Transport allowances, OTA and NDA apart from retention of many of the allowances
Cabinet Decision on 7th CPC Allowances only after 11th March 2017
“Retention of the rates of HRA and date of effect of allowances should be from 1st January 2016 and revision of rates of Transport allowances, OTA and NDA apart from retention of many of the allowances – COC Karnataka”.
The media is debating that the allowances committee headed by Shri Ashok Lavasa Finance Secretary has submitted its report to the Hon’ble Finance Minister Arun Jaitleyji on 22nd or not. Comrades as you aware that this committee period has expired on 22nd February 2017, the question is that even if it has submitted its report to the Hon’ble Finance Minister Arun Jaitleyji it is confidential document all media creation on the HRA rates are not be believed, the actual truth will be known only after the assembly elections results of five states which will be declared on March 11.
The past experience is that even if the committee decides positively the union cabinet had turn down the recommendations of the committee, hence speculation is not correct, only after the union cabinet approves the recommendations of the committee, the new orders is issued.
The main demands of the CG employees is retention of the rates of HRA and date of effect of allowances should be from 1st January 2016 and revision of rates of Transport allowances, OTA and NDA apart from retention of many of the allowances.
Comrades instead of speculation it would be better we focus on the 16th March 2017 strike, which would put pressure on the Central Government to yield to our charter of demands.
Central Government employees two greatest expectations from the Allowance Committee report…!
“Answers have not yet been found for the two big questions that are troubling the Central Government employees over the Allowance Committee report.”
Reports continue to pour in that the committee on allowances constituted under the chairmanship of Finance Secretary Ashok Lavasa is all set to submit its revision report on the recommendations given by the Seventh Pay Commission on the allowances that are being given to the Central Government employees.
There are no confirmed reports of the exact date on which the report would be submitted. The information available now come from unconfirmed and unauthorized sources. The news media claimed that the NJCA leaders were going to meet Finance Secretary Ashok Lavasa today. The federation has not yet given any confirmed information.
Nearly 50 percent of the salary increment has not yet been given to the Central Government employees. Only the Basic Pay have been revised; all the other allowances, including the HRA, continue to remain the same and are being calculated as per the 6th CPC.
The Central Government had, on 25.07.2016, published authorized Notification declaring that the recommendations of the Seventh Pay Commission are going to be implemented. Only the revised pay is being given from August onwards. Only the salary arrears are due from January 01.01.2016 onwards are being issued.
House Rent Allowance (HRA) is a very important allowance being given to Central Government employees. For the past 10 years, HRA for Central Government employees is being calculated on the basis of the population of the town or city where they are employed. The towns and cities are classified as X, Y, and Z, based on the population, and a HRA of 30, 20, and 10 percent respectively are given to them. The Seventh Pay Commission had reduced it to 24, 16, and eight percent.
Normally, the allowances are calculated from the day when the new Pay Commission recommendations get implemented.
Here are the answers to the two questions that keep troubling the Central Government employees:
1. What percentage of HRA has the Allowance Committee report recommended?
2. From which will the revised HRA be implemented, or, will it be given retrospective effect?
Seventh Pay Commission: Talks On Allowance Today, Report Likely Soon
The government had in June accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension but its suggestions relating to allowances were referred to the committee.
The panel headed by Finance Secretary Ashok Lavasa to review Seventh Pay Commission allowances is expected to soon submit its report to the government. Shiv Gopal Mishra, the convenor of National Joint Council of Action (NJCA), a joint body of unions representing central government employees, said talks in this matter are in the final leg. The employee union body will be meeting the panel members today on the issue of Housing Rent Allowance or HRA related to Seventh Pay Commission.
The government had in June accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension but its suggestions relating to allowances were referred to the committee. The Seventh Pay Commission had examined a total of 196 existing allowances and, by way of rationalisation, recommended abolition of 51 allowances and subsuming of 37 allowances.
The committee on allowances was initially given a time of four months to submit its report to the finance minister. Till a final decision is taken, all existing allowances are being paid at the Sixth Pay Commission rates.
The Seventh Pay Commission had recommended that HRA be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new Basic Pay, depending on type of cities.
The Seventh Pay Commission had also recommended that the rate of HRA be revised to 27 per cent, 18 per cent and 9 per cent respectively when DA crosses 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when DA crosses 100 per cent.
Typically, in case of housing allowance, arrears are not paid.
Allowances form a significant chunk of government employees’ salary. Some analysts had earlier said that implementation of the housing allowance portion of the Seventh Pay Commission as well as GST or Goods and Services Tax could push up average inflation.
“At worst, if the government is under pressure, this allowance can be pushed to the next year, as was done in the previous pay commissions. The housing allowance does not attract arrears,” HSBC Securities had said in an earlier report.
The Cabinet had also decided to constitute two separate committees to suggest measures for streamlining the implementation of National Pension System (NPS) and to look into anomalies likely to arise out of implementation of the Commission’s Report.
7th Pay Commission: Government all set to clear revised allowances for central staff from April 1
The 7th Central Pay Commission (CPC) recommended HRA of 24% of the basic pay for those cities with population over 5 million.
New Delhi, Feb 18: The Union Government is all set to clear revised allowances for the central government staff, precisely after a year of the implementation of the 7th Pay Commission. As per reports, one year after the implementation of the new pay and pension scheme, as recommended by the 7th central pay commission, the central government employees might have something to rejoice about after the assembly elections in 5 states are over. Reportedly, the revised allowances are likely to be effective from April 1. (ALSO READ: Committee on Allowances likely to raise HRA to 30 per cent)
House rent allowances (HRA) accounts for about 60% of the total allowances bill, as The Financial Express stated and according to the revised allowance scheme, the employees, mostly in the metropolitan cities are expected to receive greater HRA than the 7th Pay Commission actually recommended. The 7th Central Pay Commission (CPC) recommended HRA of 24% of the basic pay for those cities with a population over 5 million. But the revised HRA which is being looked at by the Finance Secretary-led panel is 30%. Notably, in the 6th Pay Commission, the HRA was at 30% as well for the cities with more than 5 million people. A draft of the cabinet note for implementation of the revised allowance is expected to be circulated soon.
As per reports, the financial implication of these revised allowances will be in line with the Central Pay Commission’s estimate of around Rs. 29,300 crores, which shall also include the railways, in the first year. The panel led by the Finance secretary is also reviewing the CPC’s recommendation regarding allowances. The pay panel has also recommended scrapping of 52 benefits while merging 36 already existing benefits.
Notably, there has been only an additional allocation of Rs. 4,500 crore in the Budget for allowances and it has been assumed that the Railways will bear Rs 7,600 crore of expenditure. But as per sources stated by FE, still, the additional allocation which will be required from the General Budget could be somewhere around Rs. 17,000 crores.
The Government has, reportedly, enough leg space, thanks to the demonetisation move and the extra taxes the people had to pay under the income disclosure schemes. But according to experts, the Budget assumptions were based on optimistic estimates of nominal GDP growth for financial year 17 (FY17) and thus for FY18.
Many have been complaining about the delay in the decision of allowances to the government employees, with some claiming the formation of the panel led by the Finance Secretary as a delaying tactic itself. But this has helped to boost the spending of the government in various programmes by around Rs. 36,000 crores in FY17.
Allowance Committee may submit its report on 20th February 2017
Federation Leaders associated with National Council JCM are keep telling that Allowance Committee might submit its report on 20th February 2017. The CG Staff are already very much upset over the Government’s deliberate attempt to delay the payment of Allowances by constituting many committees. Because the payment of revised Allowances is considered will impact the Governments Exchequers.
Lot of Committees formed and Meetings held after the Notification issued for implementation of 7th CPC Recommendations. But there is no any fruitful outcome from these meetings. No sign of making decisions which satisfy the Central government employees.
Had the Allowance like HRA is paid in revised rates from the date of Notification ie 25th July 2016, it seems more beneficial than waiting for the subcommittee reports. Because if revised allowances are not given retrospective effect, it will be a huge loss for Central Government Servants.
Reports suggests that the Allowance Committee may submit its report on 20th February 2017 and it will be notified with effect from 1st April 2017. Federation sources told that It is unacceptable and we will fight it out until the revised allowances implemented with effect from 1.1.2016
Categories: Allowance Tags: 7th CPC Recommendations, Allowance Committee, Allowances, Central Government Employees, Central Government servants, CG STAFF, Governments Exchequers, HRA, National Council JCM
Confederation: Arrears on Allowances including HRA and Transport Allowance is going to be rejected
ARREARS ON ALLOWANCES INCLUDING HRA AND TRANSPORT ALLOWANCE IS GOING TO BE REJECTED:
Now it has become clear that the Government has constituted the Allowance Committee headed by Finance Secretary, mainly to delay the implementation of enhanced allowances and finally deny the arrears by implementing the revised allowance either from 01-01-2017 or from 01-04-2017. The four months time fixed for the Allowance Committee is already extended to six months upto 22-02-2017. Reserve Bank Governor, Dr. Urjit Patel had hinted to the media that the burden of payment of arrears during this financial year will not be there, meaning that Government may not give retrospective effect to the revised allowances. The RBI Governor, Dr. Urjit Patel made the following observations, which is published in the RBI website.
“The extension of two months given to the Ministry of Finance to receive the notification on higher allowances under the Pay Commission’s award could push its fuller effect into the next financial year rather than this financial year”.
Further, the Allowance Committee has not held any negotiation with the JCM Staff Side. It just heard the views of the staff side. The request of the JCM staff side to hold one more meeting with staff side NJCM was not favourably considered by the Finance Secretary, who is the Chairman of the Allowance Committee. No indication is given as to whether the percentage of HRA recommended by 7th CPC will be enhanced to 30%, 20% and 10%. The fate of other allowances are also the same. Unless NJCA take a firm stand and negotiate with the Government by reviving the indefinite strike, the employees will be placed in a desperate and helpless situation, if Government is allowed to unilaterally declare the HRA and other allowances, without retrospective effect from 01-01-2016, and also without much modification, thereby denying crores of rupees as arrears.
New Income Tax Rates And Deductions Applicable From April 1, 2017
With some tinkering in the income tax rates for 2017-18, Finance Minister Arun Jaitley reduced the tax rate for income between Rs. 2.5 lakh and Rs. 5 lakh to 5 per cent in the Union Budget, while adding a surcharge of 10 per cent on tax for income between Rs. 50 lakh and Rs. 1 crore.
Although the basic income tax exemption limit remains the same at Rs. 2.5 lakh, there are many exemptions available in the Income Tax Act, which can substantially reduce your tax liability.
One needs to plan from the beginning of the next financial year to take maximum benefit of the income tax deductions available.
Here are the new income tax slabs for taxpayers:
|General category||Senior citizens||Super senior citizens|
|(Up to 60 years of age)||(60-80 years)||(Above 80 years)|
|Up to Rs. 2.5 lakh||Nil||Up to Rs. 3 lakh||Nil||Up to Rs. 5 lakh||Nil|
|Rs. 2,50,001-Rs. 5 lakh||5%||Rs. 3,00,001-Rs. 5 lakh||5%||Rs. 5,00,001-Rs. 10 lakh||20%|
|Rs. 500,001-Rs. 10 lakh||20%||Rs. 5,00,001-Rs. 10 lakh||20%||Above Rs. 10 lakh||30%|
|Above Rs. 10 lakh||30%||Above Rs. 10 lakh||30%|
|# Surcharge of 10% for income between Rs. 50 lakh and Rs. 1 crore|
|# Surcharge of 15% for income above Rs. 1 crore|
|# Rebate of up to Rs. 2,500 for taxable salary up to Rs. 3.5 lakh|
|# Education and higher education cess of 3%|
Here are the some of the deductions available for FY2017-18:
House Rent Allowance under Section 10 (13A) of the Income Tax Act
House Rent Allowance, commonly known as HRA, makes up a major chunk of a salaried individual’s total pay. HRA is partly exempted from tax. If you are staying in your own house or not paying any rent, your HRA will be completely taxable. However, those who stay with their parents can also claim HRA benefits by paying rent to their parents.
The amount which is allowed for exemption under HRA is calculated as minimum of:
1) Rent paid annually minus 10 per cent of basic salary plus dearness allowance
2) Actual HRA received
3) 40 per cent of basic and dearness allowance (50 per cent in case of metro cities)
Deductions under Section 80C
Section 80C of the Income Tax Act provides various provisions under which an individual can get deduction benefits up to Rs. 1.5 lakh. Employees’ Provident Fund (EPF), Public Provident Fund (PPF), Sukanya Samriddhi Account, National Savings Certificate and tax-saving fixed deposits are some of the investment options that offer benefits under Section 80C. The premium paid for life insurance plans, National Pension Scheme (NPS) and tax-saving mutual funds (ELSS) also qualify for deduction under Section 80C.
Further, one can claim tuition fees paid for up to two children, principal repayment on home loan, stamp duty and registration cost on the house bought as deduction under Section 80C.
Deductions under Section 80CCD(1B)
Introduced in Budget 2015-16, Section 80CCD (1B) provides deduction up to Rs. 50,000 for investment in NPS Tier 1 account. This deduction is over and above the deduction available in Section 80C. An individual in 30 per cent tax bracket can save up to Rs. 15,450 of tax by investing Rs. 50,000 in NPS.
Deduction of interest on housing loan (Section 24B)
Buying a house is among several other things an individual wants to do during his or her lifetime. The income tax rules also incentivise the same. Under Section 24B of the Income Tax Act, interest paid up to Rs. 2 lakh on housing loan and up to Rs. 30,000 on home improvement loan is allowable as deduction from your taxable income.
The government has however cut down tax benefits borrowers enjoyed on properties let out on rent. As per current tax laws, for properties rented out, a borrower could deduct the entire interest paid on home loan after adjusting for the rental income. On the other hand, borrowers of self-occupied properties get Rs. 2 lakh deduction on interest repayment on home loan.
However, according to the proposed change in Budget 2017, on rented properties, the borrower can only claim deduction of up to Rs. 2 lakh per year after adjusting for the rental income. And the amount above Rs. 2 lakh can be carried forward for eight assessment years.
Since the interest component of home loan repaid in initial years is higher, experts say that the borrower may not be able to fully adjust the interest paid as deduction even in subsequent years.
Deduction under Section 80EE
Under Section 80EE, an additional deduction of Rs. 50,000 is available over and above the limit of Section 24B on interest paid on home loans if the person is buying a house for the first time (the person must not own any other residential property on the date of sanction of loan). However, to avail the benefit of this section the value of the property must be below Rs. 50 lakh and the loan amount should not exceed Rs. 35 lakh. Further, the property must be bought after April 1, 2016.
Deduction under Section 80D
Premium paid for medical/health insurance for self, spouse, children and parents qualify for deduction under this Section. On can claim deduction of Rs. 25,000, if he is below 60 years of age, and Rs. 30,000 if he is above 60 years of age, towards medical insurance premium paid for self, spouse and children. Further, additional deduction of Rs. 25,000 is available if one has bought medical insurance for his parents. This deduction can go up to Rs. 30,000 if parents are above the age of 60 years.
Deduction under Section 80DD
If a tax payer has dependent parents, spouse, children or siblings who are differently-abled, then he can claim deductions up to Rs. 75,000 for expenses on their maintenance and medical treatment under this section. This deduction can increase to Rs. 1.25 lakh in case of severe disability.
Deduction under Section 80DDB
Under this section, one can claim deduction of Rs. 40,000 for treatment of certain diseases for self and dependents. The deduction can go up to Rs. 60,000 if the tax payer is above 60 years of age and if he is above 80 years of age, then the deduction amount is up to Rs. 80,000.
Deduction under Section 80E
According to the provisions of Section 80E, a taxpayer can claim deduction for interest paid on education loan for him, spouse or children. There is no upper limit on the amount of deduction. However, the loan must have been taken from a financial institutional or approved charitable institution and for full-time higher education.
Government of India
Ministry of Finance
Department of Expenditure
New Delhi, 3rd February, 2017
Subject: Regarding grant of House Rent Allowances at Chandigarh rates to Central Government Employees Posted at S.A.S. Nagar Mohali.
The undersigned is directed to refer to this Department’s O.M.No.2(37)/E.II(B)/93 dated 13.10.1993 regarding grant of House Rent Allowances (HRA) to the Central Government Employees posted within the limits of the Notified Areas of S.A.S.Nagar Mohali at par with Chandigarh.
2. References have been received from various Ministries/Departments regarding the rates of HRA admissible at S.A.S.Nagar Mohali. The matter has been considered and it has been decided with the approval of the competent authority that the special dispensation allowed to S.A.S.Nagar Mohali for grant of HRA at par with Chandigarh allowed vide the O.M. dated 13.10.1993, shall continue to be admissible further.
3. Hindi version is attached.
Under Secretary to the Government of India
General Budget 2017-18 – NFIR’s proposals for consideration
National Federation of Indian Railwaymen
3, Chemlmsford Road, New Delhi – 110 055
Indian National Trade Union Congress (INTUC)
International Transport Workers’ Federation (ITF)
Shri Arun Jaitley,
Hon’ble Minister of Finance,
North Block, New Delhi.
Sub: General Budget 2017-18 – NFIR’s proposals for consideration
The National Federation of Indian Railwaymen (NFIR) requests the Hon’ble Finance Minister to consider its proposals listed below for inclusion in the General Budget 2017-18 to be presented in Parliament in February, 2017.
1. The Income Tax exemption limit for Central Government Employees may be raised to atleast Rupees Six Lakhs
2. The Income Tax exemption limit for senior citizens may be raised to Rs.7.5 lakhs and for those Senior Citizens above 75 years age, the exemption be allowed up to Rs.10 lakhs.
3. Transport Allowance presently paid to the Central Government Employees may be exempted from the purview of Income Tax.
4. Fixed Medical Allowance to the retired Central Government Employees may be revised to not less than Rs.2,000/- Per month.
5. Grant House Rent Allowance at the rate of 30%, 20% & 10% of 7th CPC Pay to the Central Government Employees working at Cities/Towns classified as ‘X’ ‘Y’ & ‘Z’ respectively with back date.
6. Contract Labour performing jobs of perennial nature be granted wages at par with the regular employees performing similar jobs.
7. Child Care Leave for women employees be revised upwardly.
8. Pension parity be granted all those pre 1.1.2016 Pensioners of Central Government.
Proposals – Railway Specific
9. Additional funds be allocated for augmenting Railway Training Institutes and Railway Community Halls, Recreation Clubs etc’.
10. More funds may be provided for construction of new quarters in the Railways and for maintenance of Railway colonies.
11. Training Allowance for Trainers in Railways Training Institules may be enhanced to 30% of pay in lieu of the existing 15%.
12. Separate Rest Rooms for Women Railway Employees at different locations be sanctioned to enable them to stay when they visit on railway duties.
13. Additional Road Mobile Medical Vans may be approved for providing medical treatment to the railway employees and their families living at remote places and jungle stations.
Budget 2017 – Expectations of the Salaried Class
With the Union Budget 2017 just a couple of weeks away, there are expectations that the government will take some measures to help the common man, especially the salaried class, who has rallied behind the government’s decision on demonetization despite suffering a lot post the note ban.
Experts are also of the view that the upcoming Budget 2017 should provide some tax gain for the common people to soothe at least the cash ban pain.
Otherwise also, “there are only a few tax concessions available to individual tax payers. Most of the current set of tax benefits like medical reimbursement, conveyance allowance etc., at the present level, do not offer any real economic benefit to the individual tax payers.
Instead they only add to the administrative burden for the employers as claims made by the employees have to be reviewed and processed by them,” says Vikas Vasal, National Leader-Tax, Grant Thornton India LLP.
Thus, either these tax benefits should be substantially increased or they should be done away with and instead a special tax benefit like the erstwhile standard deduction be introduced. “This would simplify the tax law, reduce administrative burden and curtail unnecessary litigation associated with these tax concessions,” suggests Vasal.
In view of the above, here’s what to expect from the Budget 2017 for the salaried class:
1. Tax slab rates should be revised upwards
It is widely expected that there may be some upward revision in the income tax slabs to provide some relief to the common tax payers. What is making people more optimistic is the recent hint from Finance Minister Arun Jaitley himself that income tax slabs could further be increased, lowering the tax burden on taxpayers due to higher revenue being collected on account of cashless systems.
Some people are even expecting that the government should increase the current income tax exemption limit from Rs 2.5 lakh to Rs 4 lakh. However, the common expectation is that the exemption limit be raised from the current Rs 2.50 lakh per annum to Rs 3 lakh, while the subsequent slabs of 10 per cent, 20 per cent and 30 per cent should be applicable to annual income range of above Rs 3 lakh and up to Rs 10 lakh, above Rs 10 lakh and up to Rs 20 lakh and above Rs 20 lakh, respectively. If implemented, this will help alleviate the common man’s sufferings to some extent.
2. Reduction in tax rates
Salaried individuals are always at a loss when it comes to tax rates since they end up paying high amount of taxes when they fall into high salary brackets. Currently anyone who earns more than Rs. 10 lakh per annum pays 30% tax on the amount exceeding Rs. 10 lakh. Thus, he has to forgo a large portion of his income in taxes. Hence, apart from revision in tax slabs, change in tax rates would always be a welcome move.
“The IDS scheme of the government launched last year is expected to add a lot of tax revenues to the government coffers with almost Rs. 75,000 crore declared as black money. Considering a tax rate of 45%, almost Rs. 35,000 will be collected as taxes. These revenues are expected to help the government reduce the tax rates in the coming FY,” informs Vaibhav Sankla, Director, H&R Block India.
3. Higher deduction for interest paid on housing loan
Housing and the real estate sector are facing a lot of hardship. The recent media reports indicate that sales have declined substantially and the sentiment is quite low. It is a fact that the real estate sector is one of the key growth engines for a developing economy like India.
It provides large-scale employment to unskilled and semi-skilled workers in the country, which is a need of the hour, to boost employment opportunities for a large scale population. This sector also impacts a few of the critical sectors like cement, steel, logistics etc., which in turn are important for the overall growth of the GDP.
Also, “keeping in view the government’s agenda of providing housing for all, it is imperative that some tax concessions are provided in the Budget. One such option could be to increase the tax deduction for interest paid on housing loan from Rs 2 lakh to Rs 3 lakh. This will also provide an immediate boost to the banking services sector, which is flush with funds post demonetization and looking at avenues to lend money to the masses,” says Vasal.
Some tax experts also believe that people having a single home need to be allowed to deduct the entire amount paid as interest on home loan. Vaibhav Sankla, for instance, says that currently the home loan interest deduction is capped at Rs. 2 lakh per annum for self-occupied house property and deduction of actual interest paid is allowed for a second home that is given on rent or is deemed rented.
However, “nowadays buying a second home is not very common owing to high property prices. In such cases, home owners possessing a single home need to be allowed to deduct the entire amount paid as interest on home loan. This would be a welcome relief for salaried individuals since they do not have much scope for tax saving and moreover this is an expense-based deduction,” says Sankla.
4. Increase in deduction for insurance premium
The deduction under 80D is currently capped at Rs. 25,000 for self, spouse and dependent children. An additional deduction of Rs. 25,000 is available for parents and Rs. 30,000 if they are senior citizen parents. Hence the total deduction available under this section can go up to Rs. 55,000. A deduction for preventive medical expenses is also available up to Rs. 5,000 spent as a part of the overall deduction.
A deduction for the actual expenses made in this regard on medical insurance premiums will be a welcome move since insurance premiums are very high, especially when it comes to parents. The cap of Rs. 5,000 on preventive health check-up expenses should also be removed in budget 2017. It will help salaried individuals to save huge amounts in taxes.
5. Increase in deduction for education and childcare expenses
Childcare nowadays has become very expensive for parents, especially for those staying in metro cities. The maximum deduction for tuition fees permitted under Section 80C is Rs 1.5 lakh per financial year, with deductions eligible only for two children per assessee. Tuition fees generally constitute a very small portion of the entire education fees for the year. This deduction should be extended to other portions of the fees as well.
“Childcare in big cities also calls for daycare expenses, especially for working parents. The expenses many a time run into more than Rs 1-2 lakh per annum. These expenses should also form a part of deductions under Section 80C. This will provide another expense-based deduction to individuals and be a great move towards providing a deduction aimed at working parents,” says Sankla.
6. Deduction for rent paid where no HRA is paid by the organization
Generally, organisations pay HRA to employees in order to ease the burden of rent and there is an exemption available under the tax laws on HRA. However, there are instances when organisations do not include HRA in the salary components.
When HRA is not paid by the organization, salaried individuals are being allowed a deduction of Rs. 5,000 per month under Section 80GG from FY2016-17. This deduction should be increased to at least Rs. 10,000 for metro cities. This is because rent for a decent accommodation in metro cities has risen to this level and there is a need to increase the deduction so that salaried individuals get the benefit of this deduction.
7. Standard Deduction
There are many deductions/ exemptions like medical reimbursement, conveyable allowance, meal allowances etc. Employees actually incur much more cost and obtain very little tax benefit. To highlight, a family of four members will incur on an average, say, Rs 50,000 plus on general medical ailments. And if the family has senior/ailing households, then this expenditure for general hospital/doctor visits and medicines may be much higher.
Therefore, there is need to take a re-look at all such benefits and increase them substantially in line with the current economic reality. Same is the case with other tax benefits like travel allowance etc. Keeping this in view, there is need for a special tax benefit like the erstwhile standard deduction to be introduced the budget 2017.
Admissibility of HRA in case of residing in Govt. Guest House / Transit Facility – CGDA Orders
CONTROLLER GENERAL OF DEFENCE ACCOUNTS
ULAN BATAR ROAD, PALAM, DELHI CANIT-10
All PCDA,CDA, PCA (FYS) Kolkata
Dated: 5th Jan 2017
Subject: Admissibility of HRA in case of residing in Govt. Guest House / Transit Facility
Reference: HQrs Office Important Circulars Xo.AX/XVIII/1/18001/GH dated 21.11.200 and AN/XIV/14153/III/HRA/CCA/Vol.-X dated 18.03.2011
Comprehensive guidelines have been issued on the subject vide HQrs Office Important Circular dated 21.11.2000, to regulate the stay of officials at Guest Houses/transit accommodations. Further, HQrs Office Circular dated 18.03.2011 clearly stipulates that those occupying Government accommodation are not eligible for HRA and that the officers staying in the Inspection Quarters/Bungalow etc. in the Headquarters of their posting will not be entitled to draw HRA for the penod during which they stay in the Inspection Quarters/Bungalow etc.
2. Despite this, HQrs office is in receipt of reference from PCDA/CDA asking for clarification on the subject matter.
3. It is therefore, reiterated that those residing in Government accommodation be it Inspection Quarter or Transit Facility or Guest House shall not be granted HRA as stipulated vide GOI, Ministry of Communications, in consultation with Ministry of Finance, vide their letter No.14-4/85-NB dated 26.11.1985. Action may be taken accordingly.
Dy. CGDA (Admin)
Guidelines and instructions in the case of Husband and Wife both working for Central Government
What are all the regulations, Guidelines and instructions in the case of Husband and Wife both working for Central Government in the situations such as applying for House Building Advance, Medical Attendance Rules, Children Education Allowance, Leave Travel Concession Etc ?
How a married couple is treated in various Central Government service matters when both Husband and Wife are serving in Central Government?
The need to have a clarity on this subject gains much significance because treatment of them could differ in each law as each one would treat them according to the intention of the particular law.
For example, both are entitled to draw HRA even if they work in the same station, and live together but not provided with Government accommodation.
But when comes to Allotment of Quarters maintained by Government, only one residence will be provided to them except in the case of Judicial separation.
This article is a compilation of regulations in various service matters in respect of Husband and Wife when both are Central Government Employees.
HBA can be claimed by either of them. As per Rule 2 of HBA Rules, for the purpose of eligibility based on cost-ceiling of the house to be constructed, pay of both of them can be taken in to account. However, for the purpose of calculating the maximum amount of advance eligible under HBA, only the pay of the employee who prefers to avail HBA can be taken in to account.
Medical Attendance Rules
In non-CGHS areas, central government employees are covered by CS(MA) Rules which provide reimbursement of medical expenses incurred by the Central Government Employees. In the case of Both husband and wife working central government, to avoid double claim for same medical expenses, either Husband or Wife is permitted to make claims for self and entire family. The person who prefers to make claims under Medical Attendance Rules should be clearly mentioned in the joint declaration given by Both Husband and Wife in this regard. In the event of promotion, transfer, retirement, etc this declaration can be revised at any time. In the case of wife prefers to avail this concession for the entire family, she can either choose her parents or parents-in-law as dependents and prefer medical claim for them.
Children Education Allowance
As far as reimbursement of payment of tuition fees and hostel fees are concerned, either Husband or Wife can avail the benefit.
Family Planning Allowance
Either Husband or Wife may prefer to receive Family Planning Allowance. Since FPA is based on pay in pay band and grade pay, it will be beneficial if the employee drawing higher pay prefers to receive the same. In that case, there is no condition specified with regard to the employee who undergone family planning.
Leave Travel Concession
The above mentioned provision relating to family members can be separately declared and LTC for those members can be separately claimed by both Husband and Wife, subject to conditions that children will be eligible for the benefit in one particular block as members of the family of one of the parents only and that if husband or wife avails the facility as a member of the family of the other, he or she is not entitled for claiming the concession for self independently.
Travelling Allowance allowed in the event of transfer of one or both of them simultaneously one of the spouses can prefer the claim and the other will be treated as member of family. In such situations only one lumpsum grant can be claimed.
If a husband or wife is transfered after 60 days of transfer of the spouse, but within 6 months, 50% of transfer grant is admissible. However, if both are entitled for reimbursement of cost of travel by personal car, if required they can travel seperatey and claim both of such travel expenses.
Either Husband or Wife is entitled for family pension in addition to own pay or pension, if the spouse dies.
In the case of demise of such husband /wife also, who was receiving family pension for the demise of his/her spouse, the child / children of the deceased parents should be granted two family pensions subject to certain limits prescribed. Please refer to Rule 54 (11), CCS (Pension) Rules in this regard.
House Rent Allowance
HRA will be paid to both husband and wife even if they work in the same station and did not avail Government Quarters. Even if one of them avails the Government residence in the same station where the other spouse is working, he/she will not be entitled for HRA.
Central Government Health Scheme
While both alongwith their family members will be eligible for medical treatement under CGHS, the spouse drawing higher pay will contribute to the Scheme. The scheme does not cover the Parents of the non-contributing employee.
However, women employees can prefer to include her parents-in-law, instead of her parents, in the family for availing CGHS.
If both Husband and Wife prefer to contribute for CGHS, parents of both will be entitled for medical benefits under CGHS.
Allotment of Residence
For the purpose of allotment of residence status of each of Husband and Wife such as designation, pay/grade pay drawn, service experience etc will be considered independently. In other words, higher status of either of two can be taken into account for priority, higher grade of residence etc. In any case both Husband and wife are entitled for allotment of one residence only except in the event of judicial separation.
Transfer norms when Husband and wife are in Government service
Categories: Employees News Tags: CEA, Central Government Employees, CGHS, Children Education Allowance, Family Pension, House Rent Allowance, HRA, Leave Travel Concession, LTC, Medical Attendance Rules, spouse grounds, TA, Transfer policy, transfer reference, Travelling Allowance
HRA should be paid @ 35, 25 and 15% of pay : Agitational Programme to be held from 05.12.2016 to 09.12.2016
Agitational Programme to be held from 05.12.2016 to 09.12.2016
“HRA should be paid @ 35, 25 and 15% of pay”
BHARATIYA PRATIRAKSHA MAZDOOR SANGH
(AN ALL INDIA FEDERATION OF DEFENCE WORKERS)
(AN INDUSTRIAL UNIT OF B.M.S.)
(RECOGNISED BY MINISTRY OF DEFENCE, GOVT. OF INDIA)
REF: BPMS/Cir/17th TC/ 11
The President/General Secretary
Unions Affiliated to the Federation
& Office Bearers & Executive Committee Members
Subject: Agitational Programme to be held from 05.12.2016 to 09.12.2016.
Dear Brothers and Sisters,
It is hoped that all of you are well and busy in accelerating trade union activities. Under the banner of Government Employees National Confederation, we continuously demanded for removal of anomalies related to pay fixation, bonus, income tax, recommendations of Pay Commissions but the Governments did not pay any heed to our genuine demands and it is leading discontentment amongst the employees. Therefore, Government Employees National Confederation has decided that all the constituent Federation of GENC will observe an agitation programme throughout the country from 05.12.2016 to 09.12.2016.
Being a constituent of GENC, this federation BPMS has decided that all the affiliated unions will organize agitation programme from 05.12.2016 to 09.12.2016 like Gate Meeting, Slogan Shouting, Dharna etc. On 09.12.2016 a memorandum should be submitted to their respective Heads of the establishment addressed to Hon’ble Prime Minister of India mentioning the following demands:
1. Minimum Pay should be fixed Rs 24,000/- and fitment formula should be 3.42 in place of 2.57.
2. Under MACP Scheme, 05 financial upgradation should be granted in promotional hierarchy in the service of 30 years.
3. Annual Increment should be @ 5% in place of 3%.
4. The Benchmark ‘very good’ should be abolished for granting of promotion, financial upgradation and annual increment.
5. The Grade pay of Group ‘C’ Rs 1900/- and Rs 2000/- should be merged and upgraded to Rs 2400/-.
6. HRA should be paid @ 35, 25 and 15% of pay.
7. New Pension Scheme should be scraped.
8. FDI should be scraped in Defence and Railway.
9. Bonus should be calculated on Rs 18,000/- in place of 7,000/- because minimum pay has been enhanced from 7,000/- to 18,000/-.
10. Income tax exemption limit (tax free income) should be extended to Rs 8,00,000/-.
11. The wards of employees died in harness should be guaranteed with 100% compassionate ground appointments.
(M P SINGH)
1 The General Secretary BMS, New Delhi
2 Shri K.N.Sharma, I/C BPMS, Lucknow For information
3 The Secretary General, GENC, Kanpur
7th Pay Commission: Higher allowances from January
New Delhi: The central government employees to get their higher allowances under the 7th Pay Commission recommendations from January next, the top Finance Ministry sources told today.
When asked whether the arrears would be paid too, they said, “Higher allowances will be paid with retrospective effect from August 2016 but the central government employees unions demanded for implementation of the allowances with retrospective effect from January 2016.”
“The central government employees unions wanted that House Rent Allowance (HRA) be fixed at range 10, 20 and 30 per cent of the basic linked to the classification of the town of posting when the Pay commission recommended 24%, 16% and 8% respectively of new pay matrix, the union also asked to enhance children education allowance of Rs 3,000 and hostel subsidy of Rs 10,000 with tax exempt.” the sources said.
The union also demanded inclusion of post-graduate and professional courses in children education allowance and to hike the ‘Fixed Medical Allowance’ to Rs 2,000 with Dearness Allowance Indexation,” they added.
The unions put their demands before the Committee on Allowances headed by Finance Secretary Ashok Lavasa, which met last Thursday.
The Union Cabinet cleared the recommendations of 7th Pay Commission in respect of the hike in basic pay and pension on June 29 but decision on its suggestions relating to allowances has been referred to the Committee on allowances as the pay commission had recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances. So, there was resentment among employees over suggestions to scrap some allowances.
Fearing a jump in footfalls to deposit or withdraw cash following the demonetisation of Rs 500 and 1,000 banknotes, the Finance Ministry is likely to scale down the the higher allowances proposal.
“As people continue to suffer after demonetisation from November 9 on account of cash crunch, the Finance Minister Arun Jaitley compels to keep in abeyance the higher allowances till things normalize and it is likely to implement from January next,” Finance Ministry sources revealed.
Until acceptance of higher allowances, the allowances are now paid according to the 6th Pay Commission recommendations.
Admissibility of House Rent Allowance in the event of non-acceptance or surrender of railway residential accommodation
Admissibility of House Rent Allowance in the event of non-acceptance or surrender of railway residential accommodation – reg.
National Federation of Indian Railwaymen
The Secretary (E),
Sub : Admissibility of House Rent Allowance in the event of non-acceptance or surrender of railway residential accommodation – reg.
Ref.: (i) NFIR’s PNM item No.40/2012
(ii) NFIR’s letter No. 1/5(c )/Part I dated 22/02/2016, 25/04/2016 & 01/08/2016
(iii) Railway Board’s Letter No.E(P&A)-II/2012/FE2/4 dated 31/10/2016.
With reference to reply received vide Board’s letter dated 31/10/2016, the Federation desires to convey as follows :
(a) NFIR vide agenda item No.40/2012- last para, had demanded that condition mentioned in para 3 in Railway Board’s letter No.E(P&A)II-99/HRA-2 dated 16.03/2000 should be waived off or withdrawn.
(b) Federation also demanded that provision as mentioned in para 2 of the agenda item be made applicable to all categories of railway employees whether they belong to “Essential” or “other than Essential” categories.
It seems, the Railway Board have not examined the above issues with positive mind, taking ground reality into account with regard to availability of railway residential quarters, their condition for human occupation or otherwise. Due to total failure in maintenance of existing railway quarters on Zonal Railways, many quarters became totally outdated, unfit for occupation and overdue for demolition.
The main problem is that when the employee has vacated the quarters, he is denied HRA till the said quarter is physically occupied by another employee. This needs to be addressed.
Admissibility of House Rent Allowance in the event of non-acceptance or surrender of railway residential accommodation
Railway Board circular on HRA when not accepting or surrender of Railway Residential Accommodation
GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
The General Secretary,
3, Chelmsford Road,
New Delhi – 110 055.
New Delhi, dated 31/10/2016.
Sub.: Admissibility of House Rent Allowance in the event of non-acceptance or surrender of railway residential accommodation – reg.
Ref: 1. NFIR’s letter No. 1/5(c )/Part I dated 22/02/2016.
2. NFIR’s letter No. 1/5(c )/Part I dated 25/04/2016.
I am directed to refer to your letters quoted above. The subject item (No. 40/2012) refers to admissibility of HRA in the event of non-acceptance or surrender of Railway residential accommodation. While this is governed by Railway Board’s letter No. E(P&A)-II/99/HRA-2 dated 16/03/2000; the Federation vide their letter No. 1/5(c) Pt. I dated 09/04/2012 had asked for review of the clause mentioned in Board’s letter ibid that HRA will not be admissible to railway employees for whom railway accommodation is specifically earmarked or to those employees, whose occupation of railway quarters is essential for easy accessibility during emergencies and efficient discharge of their duties etc. (“essential staff”).
2. Subsequently, as recorded in the PNM meeting held on 30-31 January, 2014, it was explained to the Federation that wherever there is a house earmarked the employee cannot be allowed HRA. Federation contended that administration cannot deny HRA when earmarked quarters are not fit for occupation and wanted that a clarification be issued in the matter.
3. The item was further discussed by the Federation with the Board on 15/07/2015 and it was recorded as “As decided in the earlier meeting, a clarification after reviewing the matter is to be issued. Official Side stated that they propose to issue instructions in consultation with Civil Engineering Directorate. Federation stated that while they do not understand the need for a consultation with the Civil Engineering in this case, they requested the clarification be issued quickly. It was agreed to do so. The item to be closed thereafter” .
4. Accordingly, the matter had seen referred to Land & Amenities Dte. who confirmed that instructions were in place (issued vide RB/L&A No. 009/2011 dated 19/09/2011 to all Zonal Railway, PUs etc.) regarding dismantling of condemned/abandoned quarters, and that quarters declared condemned are not made available for allotment.
5. In line with the assurance recorded at para 3 above, letter No. E(P&A)- II/2012/F.E.2/4 dated 12/10/2015 was issued to all Zonal Railway and Production Units etc. that before allotment of Railway quarters, it should be ensured that such quarters are fit for occupation. Copy of this letter was also endorsed to the Federation.
6. It is, therefore, submitted that the letter dated 12/10/2015 referred to had already been issued by the time minutes of the discussions on the item held with NFIR on 8th and 9th October, 2015 were finalized/received and this was also explained in the meeting with NFIR in 18/01/2016. There has, therefore, been no deliberate violation of the assurance given to the Federation.
7. As, in terms of extant instructions, quarters unfit for occupation are not to be allotted, the question of allowing HRA against such allotment does not arise, in general. Any violation of the extant instructions can be taken up with the concerned field formation for appropriate remedial action.