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New pension rules with better pay panel package

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New pension rules with better pay panel package

This should cheer former central government employees. With the Centre notifying the new pension rules, they can expect a higher pension packet from next month. The revised pensions are higher than what the sixth Pay Commission recommended.

Although the move benefits the cross-section of retired employees, those in higher brackets have gained more in real terms. New pensions for defence and railway personnel will be notified separately.

Older pensioners have an added reason to rejoice. Centenarians will get 100% extra pension calculated at revised rates. Similarly, those over 80 years will get an additional 20% of their basic pension. This goes up by 30%, 40% and 50% for those over 85, 90 and 95, respectively.

To get an idea of the quantum of hike, a person with a basic pension of Rs 10,000 — who used to get Rs 22,050 in hand — will now receive a total pension of Rs 26,216. The new rates are effective from January 2006 and the arrears will be given out in two instalments — 40% during the current fiscal, 60% in 2009-10 . The maximum gratuity too has been revised to Rs 10 lakh, up from the earlier Rs 3.5 lakh. If an employee dies during service, his family will now get full pension (enhanced family pension) for 10 years.

The new rules also add more flexibility in retirement benefits. For instance, those who are due to retire can now get 40% of their pension commuted and get a lump sum amount in turn.


Minimum pension Rs 4,060, up from earlier Rs 2,813 in hand (revised pension to be effective from Jan 1, '06).

Maximum pension Rs 52,200, up from Rs 33,075.

Maximum gratuity up to Rs 10 lakh (depending on years of service and last salary drawn).

Enhanced family pension, for employees dying in service, to be full pension for 10 years.

Employees eligible for full pension if service is for 20 years.

Incremental additional pension for those 80 years and above. People over 100 to get double pension.

(Courtesy: Timesofindia.com )

Group D staff may not require to pay tax on arrears

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Group D staff may not require to pay tax on arrears

Group 'D' employees of the Central government, including peons and drivers, can heave a sigh of relief as they are likely to get their 40 percent salary arrears in full without any income tax deduction on implementation of Sixth Pay Commission recommendations.

While the Group 'D' government employees will not have to pay tax on arrears, those belonging to higher levels can also claim marginal benefit by filing Form 10E of the Income Tax Returns, said a senior official of the Central Board of Direct Taxes (CBDT).

Among the Group 'D' employees, drivers receive highest salary because of over-time allowance, the tax official said, adding, "even they will fall short of the taxing limit by a whisker."

High ranking officials would not get as much benefit as their Group 'D' counterparts get as they already are in a larger tax bracket and may also be required to pay a "surcharge" on their salaries, Chartered Accountant Subhash Lakhotia said. The government while approving the Pay Commission's recommendations said 40 percent of the arrears would be paid in the current year, while the remaining 60 percent would be disbursed in the next financial year. The arrears are with effect from January 2006.

On income tax liability on salary arrears, the official said, government employees would be required to pay taxes only on arrears which they would receive during the current year along with the benefits entitled under Section 89 and Rule 21 AA of the Income-Tax Act.

Lakhotia said senior officials "will only get a marginal benefit after filing Form 10E as the income-tax exemption limit for current year has increased."

CCS (Conduct) Rules 1964 - Short title, Commencement and Application

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CCS (Conduct) Rules 1964 - Short title, commencement and application


1. Short title, commencement and application

(1) These rules may be called the Central Civil Services (Conduct) Rules, 1964.

(2) They shall come into force at once.

(3) Save as otherwise provided in these rules and subject to the provisions of the Indian Foreign Service (Conduct and Discipline) Rules, 1961, these rules shall apply to every person appointed to a civil service or post (including a civilian in Defence Service) in connection with the affairs of the Union:

Provided that nothing in these rules shall apply to any Government servant who is – (a) (i) a railway servant as defined in Section 3 of the Indian Railways Act, 1890 (9 of

(ii) a person holding a post in the Railway Board and is subject to the Railway Services (Conduct) Rules;

(iii) holding any post under the administrative control of the Railway Board or of the

Financial Commissioner of Railways;

(b) a member of an All India Service;

(c) a holder of any post in respect of which the President has, by a general or special order, directed that these rules shall not apply:

Provided further that Rules 4,6,7,12,14, sub-rule (3) of Rule 15, Rule 16, sub-rules (1), (2) and (3) of Rule 18, Rules 19, 20 and 21 shall not apply to any Government servant who draws a pay which does not exceed Rs.500 per mensem and holds a non-gazetted post in any of the following establishments, owned or managed by the Government, namely:-

(i) ports, docks, wharves or jetties;

(ii) defence installations except training establishments;

(iii) public works establishments, in so far as they relate to work-charged staff;

(iv) irrigation and electric power establishments;

(v) mines as defined in clause (j) of Section 2 of the Mines Act, 1952 (35 of 1952);

(vi) factories as defined in clause (m) of Section 2 of the Factories Act, 1948 (63 of 1948);

(vii) field units of the Central Tractor Organisation employing workmen governed by
labour laws:

Provided further that these rules shall apply to any person temporarily transferred to a service or post specified in clause (a) of the first proviso to whom but for such transfer these rules would have otherwise applied.

EXPLANATION- For the purposes of the second proviso, the expression 'establishment' shall not include any railway establishment or any office mainly concerned with administrative, managerial, supervisory, security or welfare functions.

Fixation of pay on promotion on or after 1.1.2006

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Fixation of pay on promotion on or after 1.1.2006

In the case of promotion from one grade pay to another in the revised pay structure, the fixation will be done as follows:-

(i) One increment equal to 3% of the sum of the pay in the pay band and the existing grade pay will be computed and rounded off to the next multiple of 10. This will be added to the existing pay in the pay band. The grade pay corresponding to the promotion post will thereafter be granted in addition to this pay in the pay band. In cases where promotion involves change in the pay band also, the same methodology will be followed.

However, if the pay in the pay band after adding the increment is less than the minimum of the higher pay band to which promotion is taking place, pay in the pay band will be stepped to such minimum.

For example, Letus take a person promoted from prerevised scale of 3050 to 4000, that is promoted from 1900 Grade pay to 2400 Grade pay. Both the scales in one Pay band of 5200-20200.

According to Revised Pay Rules, to add 3% of the increment with existing pay in the PB and it will be any chances suppose to come less than the 5200?

Pay in the PB is running pay band, so minimum of the higher PB is 7440 to taking place for promotion.

Date of next increment in the revised pay structure

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Date of next increment in the revised pay structure

There will be a uniform date of annual increment, viz. 1st July of every year. Employees completing 6 months and above in the revised pay structure as on 1st of July will be eligible to be granted the increment. The first increment after fixation of pay on 1.1.2006 in the revised pay structure will be granted on 1.7.2006 for those employees for whom the date of next increment was between 1st July, 2006 to 1stst January, 2007.

Provided that in the case of persons who had been drawing maximum of the existing scale for more than a year as on the 1st day of January, 2006, the next increment in the revised pay structure shall be allowed on the 1st day of January, 2006. Thereafter, the provision of Rule 10 would apply.

Provided that in cases where an employee reaches the maximum of his pay band, shall be placed in the next higher pay band after one year of reaching such a maximum. At the time of placement in the higher pay band, benefit of one increment will be provided. Thereafter, he will continue to move in the higher pay band till his pay in the pay band reaches the maximum of PB-4, after which no further increments will be granted.

Note 1 - In cases where two existing scales, one being a promotional scale for the other, are merged, and the junior Government servant, now drawing his pay at equal or lower stage in the lower scale of pay, happens to draw more pay in the pay band in the revised pay structure than the pay of the senior Government servant in the existing higher scale, the pay in the pay band of the senior government servant shall be stepped up to that of his junior from the same date

Fixation of initial pay in the revised pay structure

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Fixation of initial pay in the revised pay structure:

(1) The initial pay of a Government servant who elects, or is deemed to have elected under sub-rule (3) of rule 6 to be governed by the revised pay structure on and from the 1st day of January, 2006, shall, unless in any case the President by special order otherwise directs, be fixed separately in respect of his substantive pay in the permanent post on which he holds a lien or would have held a lien if it had not been suspended, and in respect of his pay in the officiating post held by him, in the following manner, namely :-

(A) in the case of all employees:-
(i) the pay in the pay band/pay scale will be determined by multiplying the existing basic pay as on 1.1.2006 by a factor of 1.86 and rounding off the resultant figure to the next multiple of 10.

( ii) if the minimum of the revised pay band/ pay scale is more than the amount arrived at as per (i) above, the pay shall be fixed at the minimum of the revised pay band/pay scale;

Provided further that:-
Where, in the fixation of pay, the pay of Government servants drawing pay at two or more consecutive stages in an existing scale gets bunched, that is to say, gets fixed in the revised pay structure at the same stage in the pay band, then, for every two stages so bunched, benefit of one increment shall be given so as to avoid bunching of more than two stages in the revised running pay bands. For this purpose, the increment will be calculated on the pay in the pay band. Grade pay would not be taken into account for the purpose of granting increments to alleviate bunching.

New Pension Scheme-effect from 1-1-2004

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New Pension Scheme (NPS)(effect from 1-1-2004 )

G.I., M.F., F.No.1(7)(2)/2003/TA/11, Dated: 7-1-2004 read with O.M.No. 1(7)(2)/2003/TA/67-74, Dated: 4-2-2004

1.Salient features of New Pension Scheme
Government of India have introduced a new Defined Contribution Pension Scheme replacing the existing system of Defined Benefit Pension System vide Government of India, Ministry of Finance, Department of Economic Affairs Notification, dated 22-2- 2003. The New Pension Scheme comes into operation with effect from 1-1-2004 and is applicable to all new entrants to Central Government service, except to Armed Forces, joining Government service on or after 1-1-2004.

The salient features of the New Pension scheme are as follows:-

The New Pension Scheme will work on defined contribution basis and will have two tiers-Tiers-I and II. Contribution to Tier-I is mandatory for all Government servants joining Government service on or after 1-1-2004, whereas Tier-ii will be optional and at the discretion of Government servants.

..In Tier-I, Government servants will have to make a contribution of 10% of his basic pay plus DA, which will be deducted from his salary bill every month by the PAO concerned. The Government will make an equal matching contribution.

..Tier-I contributions (and the investment returns) will be kept in a non-withdrawal Pension Tier-I Account. Tier-II contributions will be kept in a separate account that will be withdrawal at the option of the Government servant. Government will not make any contribution to Tier-II account.

..The existing provisions of Defined Benefit Pension and GPF would not be available to new Government servants joining Government service on or after 1-1-2004.

..In order to implement the Scheme, there will be a Central Record Keeping Agency and several Pension Fund Managers to offer three categories of Schemes to Government servants, viz., options A, B and C based on the ratio of investment in fixed income instruments and equities. An independent Pension Fund Regulatory and Development Authority (PFRDA) will regulate and develop the pension market.

..As an interim arrangement, till such time the Statutory PFRDA is set up, an interim PFRDA has been appointed by issuing an executive order by M/o Finance (DEA).

..Till the regular Central Record Keeping Agency and Pension Fund Managers are appointed and the accumulated balances under each individual account are transferred to them, it has been decided that such amounts representing the contributions made by the Government servants and the matching contribution made by the Government will be kept in the Public Account of India. This will be purely a temporary arrangement as announced by the Government.

..It has also been decided that Tier-II will not be made operative during the interim period.

..A Government servant can exit at or after the age of 60 years from the Tier-I of the scheme. At exit, it would be mandatory for him to invest 40 per cent of pension wealth to purchase an annuity (from an IRDA, regulated Life Insurance Company, which will provide for pension for the lifetime of the employee and his dependent parents/spouse. In the case of Government servants who leave the Scheme before

G.I., M.F., F.No.1(7)(2)/2003/TA/11, Dated: 7-1-2004 read with O.M.No. 1(7)(2)/2003/TA/67-74, Dated: 4-2-2004

2.attaining the age of 60, the mandatory annuitisation would be 80% of the pension wealth.The following guidelines are issued for the implementation of the New Pension Scheme during the interim arrangement for the guidance of the PAOs/DDOs: (a) The new pension scheme becomes operational with effect from 1-1-2004. (b) Contributions payable by the Government servants towards the Scheme under Tier-I, i.e., 10% of the (Basic Pay plus DA), will be recovered from the salary bills every month.

(c) The scheme of voluntary contributions under Tier-II will not be made operative during the period of Interim arrangement and therefore no recoveries will be made from the salaries of the employees on this account.

(d) Recoveries towards Tier-I contribution will start from the salary of the month following the month in which the government servant has joined service. Therefore, no recovery will be affected for the month of joining. For example, for employees joining service in the month of January 2004, deductions towards Tier-I contribution will start from the salary bill of February, 2004. No deduction will be made for his salary earned in January 2004. Similarly, deductions for those joining service in the month of February, 2004 will start from the salary bill of March, 2004 and so on.

(e) No deductions will be made towards GPF contribution from the Government servants joining the service on or after 1-1-2004 as the GPF scheme is not applicable to them.

(f) It has been decided that pending formation of a regular Central Record Keeping Agency, Central Pension Accounting Office will function as the Central Record Keeping Agency for the above scheme.

(g) Immediately on joining Government service, the Government service, the Government servant will be required to provide particulars such as his name, designation, scale of pay, date of birth, nominee(s) for the fund, relationship of the nominee, etc., in the prescribed form (Annexure-I). The DDO concerned will be responsible for obtaining this information from all Government servants covered under the new Pension Scheme. Consolidated information for all those who have joined service during the month shall be submitted by the DDO concerned in the prescribed format (Annexure-II) to his pay and Accounts Officer by 7th of the following month. Annexure-I will be retained by DDOs.

(h) On receipt of Annexure-II from the DDOs, PAO will allot a unique 16 digit Permanent Pension Account Number (PPAN). The first four digits of this number will indicate the calendar year of joining Government service, the next digit indicates whether it is a Civil or a Non-Civil Ministry (for all Civil Ministries this digit will be "1"), the next six digits would represent the PAO code (which is used for the purpose of compiling monthly accounts), the last five digits will be the running serial number of the individual Government servant which will be allotted by the PAO concerned. PAO will allot the serial number pertaining to individual Government servant from ‘0001’

G.I., M.F., F.No.1(7)(2)/2003/TA/11, Dated: 7-1-2004 read with O.M.No. 1(7)(2)/2003/TA/67-74, Dated: 4-2-2004

3.running from January to December of a calendar year. The following illustration may be followed: -

The first Government servant joining service under Ministry of Civil Aviation under the accounting control of PAO (Sectt.), New Delhi in 2004, shall be allotted the following PPAN: -Calendar Year Civil Min.PAO Code Serial Number 2 0 0 4 1 0 4 0 8 6 6 0 0 0 0 1

(i) The Pay and Accounts Officer will maintain an Index Register for the purpose of allotment of PPAN to new entrants to Government service. Format of the index register is given in Annexure-VII.

(j) The PAO will return to the DDO concerned, a copy of the statement duly indicating therein the Account numbers allotted to each individual by 10th instant. DDO in turn will intimate the account number to the individuals concerned and also note in the Pay Bill Register.

(k) The particulars of the Government servants received from the various DDOs will be consolidated by the PAO in the format (Annexure-II-A) and sent to the Principal Accounts Office by the 12th of every month.

(l) The Principal Accounts Office in turn will consolidate the particulars in the prescribed format (Annexure-II-B) and forward the same to Central Pension Accounting Office by 15th instant. The CPAO will feed this information in their computer database.

(m) The DDOs/CDDOs will prepare separate Pay Bill Registers in respect of the Government servants joining Government service on or after 1-1-2004. The DDOs/CDDOs will have to prepare separate pay bills in respect of these Government servants and will send the same with all the schedule to the PAO on or before 20th of the month to which the bills relate. Cheque drawing DDOs may note that hereafter in respect of Government servants joining service on or 1-1-2004, they will only prepare pay bills and not make payment. They will send such bills to the Pay and Accounts Offices for precheck and payment.

(n) The DDO/CDDO will prepare a recovery schedule in duplicate in the prescribed form (Annexure-III) for the contributions under Tier-I and attach them with the bay bills. The amount of the Contributions under Tier-I should tally with the total amount of recoveries shown under the corresponding column in the pay bill.

(o) The accounting procedure for these deductions is being finalized and shall be notified shortly.

(p) It may be noted that along with the salary bill for the Government servants who join service on or after 1-1-2004, the DDO/ CDDO shall also prepare a separate bill for drawl of matching contributions to be paid by the Government and creditable to Pension account.

(q) The bill for drawl of matching contribution should also be supported by schedules of recoveries in form (Annexure-IV).

G.I., M.F., F.No.1(7)(2)/2003/TA/11, Dated: 7-1-2004 read with O.M.No. 1(7)(2)/2003/TA/67-74, Dated: 4-2-2004

4.(r) On receipt of the salary bills in respect of Government servants joining service after 1-1-2004, PAO will exercise usual checks and pass the bill and make the payments. After the payment is made and posting done in the Detailed Posting Register, one set of schedules relating to Pension contributions will be detached from the bills as done in the case of other schedules such as GPF, Long-term advances. The schedules will then be utilized for posting the credits of contributions in the Detailed Ledger Account of the individual.

(s) The employee’s contributions under Tier-I and Tier-II and Government’s contribution should be posted in different columns of the individual ledger account (to be maintained in the format in Annexure-V) and Broadsheet and tallied with the accounts figures as being done in the case of GPF.

(t) These accounts should not be mixed with GPF accounts and these records/ledger accounts should be independent of GPF accounts maintained in the case of pre-1-1-2004 entrants.

(u) The PAO will consolidate the information available in the New Scheme schedules received from the various DDOs and forward the same in a floppy in the prescribed form (Annexure-VI) to Principal Accounts Office by 12th of the month following the month to which the credit pertains. Principal Accounts Office in turn will consolidate the information and send the same in electronic form to the Central Pension Accounting Office by 15th.

(v) CPAO on receipt of this information from all the Pr. Aos (including the Non- Civil Ministries) will update its database and generate exception reports for missing credits, mismatches, etc., which will be sent back to the PAOs concerned through the Pr. AOs for further action.

(w) Whenever any Government servant is transferred from one office to another either within the same accounting circle or to another accounting circle, balances will not be transferred by the PAO to the other Accounts Office. However, the Drawing and Disbursing Officer should clearly indicate in the LPC of the individual the unique account number, the month up to which Government servant’s contribution and Government’s contribution have been transferred to the Pension Fund.

(x) No withdrawal of any amount will be allowed during the interim arrangement. Provisions regarding terminal payments in the event of untimely death of an employee or in the event of his leaving the Government service during the interim period shall be notified in due course.

(y) Detailed instructions on the interest payable on Tier-I balances shall be issued in due course.

(z) At the end of each financial year, the CPAO will prepare annual account statements for each employee showing the opening balance, details of monthly deductions and Government’s matching contributions, interest earned, if any, and the closing balance. CPAO will send these statements to the Pr. A.O. for onward transmission to the DDO through the PAO. (aa)After the close of each financial year, CPAO will have to report the de4tails of the balances (PAO-wise) to each Principal Accounts Offices, who will forward the information to each PAO for the purpose of reconciliation.

The G.I., M.F., F.No.1(7)(2)/2003/TA/11, Dated: 7-1-2004 read with O.M.No. 1(7)(2)/2003/TA/67-74, Dated: 4-2-2004

5.PAO will reconcile the figures of contributions posted in the ledger account of the individuals as per their ledger with figures as per the books of CPAO. (bb)After the appointment of CRA and Fund Managers, this office will issue detailed instructions on transfer of balances to CRA.
Architecture of the New Pension System
..It will have a Central Record Keeping and Accounting (CRA) infrastructure, several Pension Fund Managers (PFMs) to offer three categories of schemes, viz., options A, B and C.
..The participating entities (PFMs and CRA) would give out easily understood information about past performance, so that the individual would be able to make informed choices about which scheme to choose.

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