Extracts of provisions in F.R. 56

Extracts of provisions in F.R. 56 F.R. 56(a) Except as otherwise provided in this rule, every Government servant shall retire from service on the afternoon of the last day of the month in which he attains the age of sixty years:
Provided that a Government servant whose date of birth is the first of a month shall retire from service on the afternoon of the last day of the preceding month on attaining the age of sixty years.
Provided further that a Government servant who has attained the age of fifty-eight years on or before the first day of May, 1998 and is on extension in service, shall retire from the service on expiry of his extended period of service.
Or on the expiry of any further extension in service granted by the Central Government in public interest, provided that no such extension in service shall be granted beyond the age of 60 years.
(b) A workman who is governed by these rules shall retire from service on the afternoon of the last day of the month in which he attains the age of sixty years.
(bb) The age of superannuation in respect of specialists included in the Teaching, Non-Teaching and Public Health Sub-cadres of Central Health Service shall be 62 years.
“Provided that for the specialist included in the Teaching sub-cadres of the Central Health Service who are engaged only in teaching activities and not occupying administrative positions, the age of superannuation shall be sixty-five years:
provided further that such specialist of the Teaching Sub-cadres of Central Health Service who are occupying administrative positions shall have the option of seeking appointment to the teaching positions in case they wish to continue in service up to sixty-five years.”
(bbb) The age of superannuation in respect of nursing teaching faculty with M.Sc in Nursing in the Central Government Nursing Institutions shall be 65 years subject to the condition that they continue to function as faculty members after the age of 60 years.
(c) Deleted.
(cc) Deleted
(d) No Government servant shall be granted extension in service beyond the age of retirement of sixty years:
Provided that a Government servant dealing with budget work or working as a full-time member of a Committee which is to be wound up within a short period of time may be granted extension of service for a period not exceeding three months in public interest;
Provided further that a specialist in medical or scientific fields may be granted extension of service up to the age of sixty-two years, if such extension is in public interest and the grounds for such extension are recorded in writing:
Provided also that an eminent scientist of international stature may be granted extension of service up to the age of 64 years, if such extension is in public interest and the grounds for such extension are recorded in writing.
Provided also that the Central Government may, if considers necessary in public interest so to do, give extension in service to the Defence Secretary, Foreign Secretary, Home Secretary, Director, Intelligence Bureau, Secretary, Research and Analysis Wing and Director, Central Bureau of Investigation in the Central Government for such period or periods as it may deem proper on a case-to-case basis, subject to the condition that the total term of such Secretaries or Directors, as the case may be, who are given such extension in service under this rule, does not exceed two years.
Provided also that notwithstanding anything contained in the fifth proviso, the Central Government may, if considers it necessary, in public interest, so to do, give an extension in service for a further period not exceeding three months beyond the said period of two years to the Home Secretary and the Defence Secretary.
Provided also that, the Central Government may, if considered necessary in public interest so to do, give extension of service to the Secretary, Department of Space and the Secretary, Department of Atomic Energy, for such period or periods as it may deem proper subject to a maximum age of 66 years.
Provided also that the Appropriate Authority shall have the right to terminate the extension of service before the expiry of such extension by giving a notice in writing of not less than three months in the case of a permanent or a quasi-permanent Government servant, or, of one month in the case of a temporary Government servant, or pay and allowances in lieu of such notice.

Increase of Allowances and Advances by 25% from 01.01.2011 as per the 6th CPC recommendations

We have compiled the complete list of Allowances and Advances to be increased by 25% from 01.01.2011, wake of Dearness Allowance crosses over 50%. And there is no word of merging with the basic pay, whenever the Dearness Allowance cross 50% in the 6th CPC recommendations. The following allowances only revised at the moment…

Name of the Allowances & Advances	Existing	Revised
Children Education Allowance	Rs.1000	Rs.1250
Hostel Subsidy Allowance	Rs.3,000	Rs.3,750
Special Compensatory Hill Area Allowance	Rs.600 / Rs.480	Rs.750 / Rs.600
Special CompensatoryScheduled / Tribal Area Allowance	Rs.400 / Rs.240	Rs.500 / Rs.300
Project Allowance	Rs.1,500 / Rs.1,000	Rs.1,875 / Rs.1,250
Speical Compensatory (Remote Locality) Allowance	Rs.2,600/Rs.2,100/ Rs.1,500/Rs.400	Rs.3,250/Rs.2,625/ Rs.1,875/Rs.500
Cycle Maintenance Allowance	Rs.60 (Per month)	Rs.75 (Per month)
Mileage for road journey all components of daily allowance on tour	Rs.500 / Rs.300 / Rs.200 / Rs.150 / Rs.100	Rs.625 / Rs.375 / Rs.250 / Rs.190 / Rs.125
Rates of Fixed Conveyance Allowance under SR-25 (Motor Car)	Rs.1,120 / Rs.1,680 / Rs.2,070 / Rs.2,430 / Rs.3,000	Rs.1,400 / Rs.2,100 / Rs.2,590 / Rs.3,040 / Rs.3,750
Rates of Fixed Conveyance Allowance under SR-25 (Other modes)	Rs.370 / Rs.480 / Rs.640 / Rs.750 / Rs.850	Rs.470 / Rs.600 / Rs.800 / Rs.940 / Rs.1,070
Washing Allowance	Rs.60	Rs.75
Split Duty Allowance	Rs.200	Rs.250
Spl. Allowance for Child Care for Women with Disabilities and Education Allowance for disabled children	Rs.1,000 per month	Rs.1,250 per month
Cash Handling Allowance	Rs.600 / Rs.500 / Rs.400 / Rs.300 / Rs.150	Rs.750 / Rs.625 / Rs.500 / Rs.375 / Rs.190
Risk Allowance	DOPT 21012/1/2008-Estt.(Allowance)	12.3.2009
Postgraduate Allowance	Rs.1,000 / Rs.600	Rs.1,250 / Rs.750
Desk Allowance	Rs.600	Rs.750
Bad Climate Allowance	Rs.400 / Rs.240	Rs.500 / Rs.300
Advances for purchase of Bicycle	Rs.3,000	Rs.3,750
Advances for purchase of Warm clothing	Rs.3,000	Rs.3,750
Festival Advance	Rs.3,000	Rs.3,750
Natural Calamity Advance	Rs.3,000	Rs.3,750

Finance Commission says that Pay Commission Arrears is a self-inflicted distortion,

The windfall government employees receive by way of pay commission award arrears may no longer be forthcoming. The government is examining a proposal to implement pay commission awards prospectively on the lines of finance commission awards, as large arrears throw the finances of both the Centre and states in disarray.

It is reported that the Government is considering the suggestions of 13th Finance Commission to avoid payment of arrears arising out of retrospective implementation of Pay Commission in the future . It is also reported that final call on the issue would be taken when the next pay commission is constituted. Pay commissions are usually set up at intervals of 10 years. The Sixth Pay Commission, the most recent, gave its recommendations in March 2008. It had proposed pay raises between 20% and 40% for government employees.

The finance ministry had told a parliamentary panel last week that the issue should be deliberated upon as retrospective implementation of pay commission awards has had adverse impact on the finances of the Centre as well as the states, a government official privy to the meeting said. Many state governments had expressed concerns over the issue of arrears. States set up pay commissions for their own employees after the pay commission for the central government employees submits its report.

"While many reforms can and should be contemplated to end this self-inflicted distortion, one action that could be taken immediately is that of making the pay award commence from the date on which the recommendations of future pay commissions are accepted by the government," the 13th Finance Commission had said in its report.

The burden of arrears on the central government from the Sixth Pay Commission award was Rs 28,160 crore on a salary base of Rs 44,360 crore. This was because the recommendations of the panel announced in 2008 were implemented retrospectively from January 1, 2006.

To save itself from a larger fiscal trouble, the Centre disbursed the arrears in two installments: 40% in 2008-09 and 60% in 2009-10. The arrears contributed significantly to the Centre overshooting its target in 2008-09, ending the year with a fiscal deficit of 6% of the gross domestic product (GDP) against the budgeted 2.5%. The fiscal deficit rose to 6.4% of GDP in 2009-10 as pay commission arrears pushed up the expenditure when the government was battling slowdown in revenues.

The Centre had to readjust its fissense but can work only if pay commission reports come well in time for implementation prospectively," said D K Srivastava, director, Madras School of Economics. Unlike the private sector, the government does not give annual salary hikes to its employees. Instead, it gives out dearness allowance twice a year to compensate for the rise in prices. The periodic pay commissions help adjust government salaries to market benchmarks. Most experts find the system flawed, as the performance benchmarks are not included in the salary revisions. The Sixth Pay Commission had recommended a performance related pay for government employees.

It has budgeted a fiscal deficit of 4.6% of GDP for 2011-12, which is projected to drop to 3.5% in 2013-14. The finance commission had said if the Centre implemented pay awards prospectively, it would give state governments an opportunity to time their awards in a way that the need for arrears does not arise.

"If finance commissions are able to present their inter-governmental recommendations without any need for retrospective fiscal transactions, then the same should be possible in the case of pay commission as well," the commission had reasoned in its report.

Source: The Economic Times

Notification for exemption from filing Income Tax Return soon

As many as 85 lakh salaried tax payers with an annual income of up to Rs 5 lakh will not have to file income-tax return from now onwards, a finance ministry official said.

"No income-tax returns would be required for salaried persons earning up to Rs 5 lakh per annum. We would notify this in first week of June," outgoing Chairman of Central Board of Direct Taxes Sudhir Chandra told reporters recently.

The Union Finance Minister Mr.Pranab Mukhejee also said on 24^th May, 2011 that the salaried tax payers with an income less than Rs. 5 Lakh should not file Income Tax Return from the Assessment Year 2011-12 ( ie from the Financial year 2010-11). This was according to his budget proposal on the end of February, 2011.

But, earlier it was not clear that the implementation of this proposal will be come in to effect from this year or only from the financial year 2011-12. Now it is clear that the effect of not filing income tax return for the income less than Rs. 5 lakh is from the financial year 2010-11 onwards.

When addressing the 27th annual conference of the Chief Commissioners and the Directors-General of Income Tax the Finance Minister reported this matter.

However, such tax payers would have to file return if they want to claim refunds, Mr. Chandra said.

As per the Memorandum to the Finance Bill 2011, the government will be issuing a notification exempting ''classes of persons'' from the requirement of furnishing income tax returns.

In case such a salary earner has income from other sources like dividend, interest etc and does not want to file returns, he would have to disclose such income to his employer for tax deduction.

In the scenario, the Form 16 issued to salaried employees will be treated as Income Tax Return.

The idea behind the move is that in cases where there are no other sources of income, filing of a return is a duplication of existing information.

Source: PTI

Consolidated list of CGHS empanelled hospitals

Ministry of Health and Family Welfare has issued a detailed office Memorandum providing consolidated list of hospitals, which are empanelled in 2010-11.  clarification is issued in respect of hospitals which were already empanelled under CGHS prior to their empanelment in 2010-11 and are approved for the same specialists for which they were empanelled earlier under the previous tender/continuous empanelment scheme.

This consolidated List of hospitals includes empanelled hospitals in Delhi, Ahmedabad, Allahabad, Bengaluru, Bhopal, Bhubaneshwar, Chandigarh, Chennai, Dehradun, Guwahati, Hydrabad, Jaipur, Jabalpur, Kanpur, Kolkata, Lucknow, Meerut, Mumbai, Nagpur, Patna, Pune, Ranchi, Shillong and Thiruvananthapuram.

List of hospitals which have acquired NABH status has been updated.  The term endoscopic procedures under which category hospitals are empanelled shall include endoscopic surgery as well as laparoscopy and laparoscopic surgery for the purpose of providing treatment facilities.

Treatment in casuality OPD shall be treated as treatment under emergency and credit facility shall be extended to the CGHS beneficiaries.  However, routine OPD consultation shall not be considered emergency.

NABL accreditation is not prescribed for imaging centres and therefore list of rates prescribed NBL centres shall be applicable for imaging centres.

Fore more details download this Office Memorandum No: S.11011/23/2009-CGHS D.II/Hospital Cell (Part-I) dt 11.04.2011

Income tax benefits on Education loan

The ever-increasing cost of education is worrying parents who want their children to pursue higher education. Financing the high-priced education is a matter of concern for all such parents.

However, the last decade has seen Indian banking industry coming to the rescue of such parents by way of granting education loans. Like the banking sector, the income tax laws have also kept pace with the need of supporting these students and parents. This article, is about various aspects of tax benefits surrounding education loans.

Nature of deduction

The income tax laws allow you to claim interest paid by you in respect of an education loan against your taxable income without any upper limit. However, the deduction is available only in respect of interest and there is no provision in the present law for allowing deduction on the repayment of the principal amount. Moreover, there is no restriction as to when you can start claiming this deduction. You can start repayment of these loans during the period your child is studying or after completion of his studies.

It is important to know that there is no bar on claiming tax benefits in respect of tuition fee paid out of the education loans taken by you and interest paid on such loan. You can claim both the deductions i.e. deduction in respect of tuition fee and interest on loan taken for paying such fees simultaneously.

When and for what period?

The deduction is available on the basis of actual payment of interest. If you pay the interest for earlier years in a single year, you will get the deduction in respect of all the actual interest paid irrespective of the year to which the interest relates. If you are paying arrears of interest, collect certificates mentioning the total amount of interest paid by you during the year from your banker.

The deduction for interest payment is available for eight consecutive years. The first year term shall begin from the year in which you first start paying the interest on such education loan.

This year may or may not be necessarily the year after you have obtained the loan. In case you have decided to opt for moratorium during the education period, the eight year period shall start later.

However, if your loan tenure exceeds eight years, you cannot claim the deductions beyond the consecutive period of eight years. If you repay the loan before eight years, logically, the deduction will not be available once the loan is fully repaid. Therefore, you should plan to repay the education loan within eight years.

Which courses qualify?

Any education loan taken for pursuing any course after senior secondary examination (HSC as is popularly known) qualifies for this purpose. Earlier, this benefit was given only for the full-time courses of graduation or post graduation in specified fields like medicine, engineering, etc.

However, the budget of 2009 changed all this and now you can claim tax benefits in respect of part-time courses too. What is required is that the course should be pursued from any government-recognised school, board or university, though not necessarily under the central government. It may be recognised even by a local authority. Even a part-time course or a diploma course will qualify for the purpose of claiming this interest deduction, provided the institution imparting such course is recognized.

Deduction for tuition fee in respect of two children is available under Section 80 C if the education institution is situated in India. However, the interest deduction for education loan can be claimed even if the study is pursued outside India.

Who can claim the benefit?

The benefit is available only to an individual and not to the HUF (Hindu Undivided Family) unlike many income tax benefits which are available to individual and HUF both.

Earlier, the law provided for deduction of interest only to the person who had taken the loan for his own studies. This was amended in the budget of 2007 and since then you can claim deduction if the loan has been taken for study of yourself, your spouse, child or any other child for whom you are a guardian.

It is advisable to claim the benefit of interest for such loan in the income tax returns of the person who falls in the higher tax slab. Generally, it would be the parents of the student who normally fall in the higher tax slabs as it is highly unlikely that the person for whose education this loan is taken falls in the higher slab.

The parents can take the benefit of interest deduction in case the interest is agreed to be paid during continuance of the education. In case the person for whom the loan is taken falls in higher tax slab, he can pay the interest and claim it in his income tax returns.

Therefore, it is advisable to take an education loan in joint names of the parent and the student so as to have the flexibility for claiming the interest.

Where to borrow?

Interest will be eligible for deduction if the loan is taken from any financial institution or approved charitable institution. Interest on loan taken from relatives or friends will not be eligible for deduction. The first category covers all the banks including cooperative banks and one non-banking institution, Credila, a subsidiary of, HDFC Ltd,is also approved by the government for this purpose. There is another category of institutions, which includes charitable institutions and NGOs, from where loans can be taken to qualify for tax benefit on interest.

Consequences of default

In case the loan has been taken for the purpose of your own education, it is very important that you service it properly. Defaults have long-term ramifications for you. Since you are at the beginning of your career and will need to avail many credit facilities, any default will spoil your credit history. This will jeopardise your chances of getting credit in future.

So, now with easy availability of recognized loans coupled with tax benefits, you can realise your dream of making it big in life.

Detailed Income tax Rates for financial year 2011-12 -(AY 2012-13)

The Income Tax Rates applicable for the financial year 2011-12 (Assessment year 2012-13) have been revised. The following is the New Income Tax structure for the year 2011-12.

In case of individual (other than II and III below) and HUF

	Income Level	Income Tax Rate
i.	Where the total income does not exceed Rs.1,80,000/-.	NIL
ii.	Where the total income exceeds Rs.1,80,000/- but does not exceed Rs.5,00,000/-.	10% of amount by which the total income exceeds Rs. 1,80,000/-
iii.	Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.8,00,000/-.	Rs. 32,000/- + 20% of the amount by which the total income exceeds Rs.5,00,000/-.
iv.	Where the total income exceeds Rs.8,00,000/-.	Rs. 92,000/- + 30% of the a mount by which the total i ncome exceeds Rs.8,00,000/-.

II. In case of individual being a woman resident in India and below the age of
60 years at any time during the previous year:-

	Income Level	Income Tax Rate
i.	Where the total income does not exceed Rs.1,90,000/-.	NIL
ii.	Where total income exceeds Rs.1,90,000/- but does not exceed Rs.5,00,000/-.	10% of the amount by which the total income exceeds Rs.1,90,000/-.
iii.	Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.8,00,000/-.	Rs. 31,000- + 20% of the amount by which the t otal income exceeds Rs.5,00,000/-.
iv.	Where the total income exceeds Rs.8,00,000/-	Rs.91,000/- + 30% of the amount by which the total income exceeds Rs.8,00,000/-.

III. In case of an individual resident who is of the age of 60 years
or more at any time during the previous year:-

	Income Level	Income Tax Rate
i.	Where the total income does not exceed Rs.2,50,000/-.	NIL
ii.	Where the total income exceeds Rs.2,50,000/- but does not exceed Rs.5,00,000/-	10% of the amount by which the total income exceeds Rs.2,50,000/-.
iii.	Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.8,00,000/-	Rs.25,000/- + 20% of the amount by which the total income exceeds Rs.5,00,000/-.
iv.	Where the total income exceeds Rs.8,00,000/-	Rs.85,000/- + 30% of the amount by which the total income exceeds Rs.8,00,000/-.

IV. In case of an individual resident who is of the age of 80 years
or more at any time during the previous year:-

	Income Level	Income Tax Rate
i.	Where the total income does not exceed Rs.2,50,000/-.	NIL
ii.	Where the total income exceeds Rs.2,50,000/- but does not exceed Rs.5,00,000/-	Nil
iii.	Where the total income exceeds Rs.5,00,000/- but does not exceed Rs.8,00,000/-	20% of the amount by which the total income exceeds Rs.5,00,000/-.
iv.	Where the total income exceeds Rs.8,00,000/-	Rs.60,000/- + 30% of the amount by which the total income exceeds Rs.8,00,000/-.

Education Cess: 3% of the Income-tax.

• SALARY INCOME INCLUDES :- PAY, DP, Band pay, Grade pay, DA, OTA, BONUS, CCA, Honorarium, Children Education Allowance Received, Pension, Subsistence Allowance, Government's Contribution in New Pension Scheme, Transport Allowance above Rs.800/- per month.
• House Rent Allowance to the extent not exempted under Section 10 (13A) of Income Tax Act.
• Agricultural Income. Click here for more details

Exemption under Section 10 (13A) in respect of HRA – Calculation Method:

Least of the following amount is to be treated as exempt from Income Tax.

• Actual House Rent Allowance Received, or
• Rent paid in excess of 10% of Pay in Pay band and Grade Pay or
• 50% of Pay in Pay band and Grade Pay  if the employee is in Chennai/Mumbai/Kolkatta/Delhi and 40% of Pay in Pay Band and Grade Pay for the employees is in other places.
• If the employees resides in his/her own house or in a house for which he/she does not pay any rent, no HRA exemption is available.

TAX-INCENTIVE FOR SAVINGS – MAXIMUM LIMIT Rs. 1,00,000/-(Sec 80 CCE)

• Life Insurance Premium (limited 20% of the sum assured)
• Subscriptions to the GPF/CPF
• Subscriptions to the Mutual Fund
• Contribution toward CGEGIS
• Investments in NSC VIII & Accrued Interest on NSC deemed to be re-invested;
• Fixed Deposits for more than 5 years in SBI/Scheduled Banks/Post Office Five Year Time Deposit Scheme
• Repayment of HBA principal -Government /Bank/LIC/Housing Board/Co-operative Bank
• Tuition Fee paid limited to two children
• Subscriptions to equity shares/debentures forming part of any” eligible issue of Capital”—like Infrastructure Bonds   (Sec 80 C)
• Contribution to any PENSION FUND, ULIP
• Contribution both by the individual and Government made to New Pension scheme (Sec 80 CCD)

Apart from  this 1 lakh,  amount up to Rs.20,000/- invested in Infrastructure Bond approved by Government is exempted. (Sec 80 CCF)

CHAPTER VI DEDUCTIONS

• Medical Insurance Premium: Maximum Rs.15,000/- and Rs.20,000 (for Senior Citizen) (Sec 80 D). Also Meducal Insurance Premium up to Rs.15,000 paid for Parents is also allowed to be deducted from the income. Click here for more details
• Handicapped Dependents- Maximum Rs.50,000/- (Disability) or Rs.75000/- ( Severe Disability) -Sec 80 DD- This claim required certficate under Section 139 of the Income Tax Act. Click here for more details
• Medical Treatment Expenses: Maximum Rs.40,000/- (Sec 80 DDB) Click here for more details
• Higher Education Loan repayment (Sec 80 E)- No limit- Click here for more details
• Approved Donation – Section 80G. Click here for more details
• Deduction under Section 80 U – An amount of Rs.50,000 and Rs.1 lakh in the case of self is physically disabled and severely physically disabled respectively. Click here for more details
• Deduction under Section 80 GG – Rent paid subject to ceiling as deduction under Section 80 GG if HRA not received. Click here for more details
• Deduction under Section 80 GGC – Donation paid to Political Parties. Click here for more details
• Deduction under Section 80 GGA – Donation paid to Scientific and Research and Rural development. Click here for more details

Income or Loss on House Property:

Interest paid on Loan obtained for constructing house property can not be deducted as such. It should be treated as loss on house property and income if any such as rent recived from the house property should be treated as an income from House property.

There is also a change with respect to the tax benefit available for contribution to the New Pension Scheme (NPS). Currently contributions to the NPS by both the employer as well as the employee have to be counted for the tax benefit of a deduction. The change now proposes that the contribution of the Central Government or other employer to the NPS will not be eligible for the deduction. This means that the individual will have to take this out of the calculation and use only their own contributions while completing the required limit.