Children Education Allowance revised for Central Government Employee w.e.f. 01.01.2014

While answering to a question in Parliament on 18.7.2014, Finance Minister Shri Arun Jaitley said in a written form regarding the details of Children Education Allowance that it has been informed by the Department of Personnel and Training that the annual ceiling limit for reimbursement of Children Education Allowance (CEA) is 18,000/- per child. The Hostel Subsidy shall be 4,500/- per month per child.

The annual ceiling for reimbursement of CEA for disabled children of Government employees is 36,000/- per annum per child and the rates of Hostel Subsidy for disabled children of Government employees is 9,000/- per child per month.

These revisions are applicable with effect from 1st January, 2014.

The reimbursement is admissible for the children studying in institutions affiliated to any Board or recognised institution, whether in receipt of Government aid or not, recognised by the Central or State Government or Union Territory Administration or by University or a recognised educational authority having jurisdiction over the area where the institution is situated.

Source: CG Staff News

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Latest amendment in Date of Increment in 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 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 1st January 2007.

By the latest modification in revised pay structure as per Government Resolution No. Vepur 1013/Pra.Kra.6/Seva-9 Dated 03, September, 2013, it is clarify that the annual increment date is uniform i.e. 1st July of every year calender after 2007.  Thereafter some department has been placed the date of increment  is 1st January despite 1st July.

The latest amended Government Resolution has clear the upcoming consequences regarding Date of Increment and how it define.  Important note is that the following clarification for state Employee in view of Date of Increment in Maharashtra.

Date of Pay Fixation in Revised Pay Scale - 01st January, 2006

1st Date of Increment in Revised Pay Structure - 1st July, 2006 

(Note: If the old Increment i.e. 5th Pay Scale is comes on or before 1st January)

or

1st Date of Increment in Revised Pay Structure - 1st January, 2007

2nd Date of Increment in Revised Pay Structure - 1st July, 2007

and thereafter 1st July (1st July, 2008) is fixed in Every Year.

Download Latest amendment G.R. for Date of Increment (Click Here)

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Can Claim Exemption of Conveyance Allowance jointly ?

In the Income Tax Law, if a both employee (Husband & Wife) works with same Employer they can't be claim exemption of Conveyance Allowance u/s. 10 of Income Tax Act and the both assessee purchase immovable property as Long Term Capital gain jointly, the exemption is available u/s. 54 of Income Tax Act.

It’s a very interesting query with two different views are possible. There is nothing specific in the Income Tax Act/ Rules to express one side opinion on the issue. One can form an opinion that section 10(14) read with Rule 2BB restricts an exemption towards conveyance allowance to Rs. 800/- per month for both the employments taken together. The possibility of another interpretation that Rs. 800/ per month is a deduction admissible per employment and not per assessee cannot be over ruled. I have a conservative opinion & of the view that Rs. 800/- per month deduction is available per assessee and not separately for each employment.

No deduction is admissible u/s 54 towards Short term capital gain. Exemption u/s 54 is available only if the assessee has Long Term Capital Gain (LTCG).

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Provision in Income Tax Law regarding Maintenance Allowance to Spouse.

In case of Divorce, if the male Assessee once paid amount of Maintenance Allowance to spouse is not to be taxable in female Assessee's hands. It is the capital receipt against one time or monthly receipt payment of Maintenance Allowance to Spouse by the Male Assessee is not be taxable amount in spouse hands.

In such case, the any other family members contribution for spouse Maintenance Allowance after Divorce would not carry any Income Tax implication. The amount paid could be debited to the capital account. If male Assessee are filing either ITR-4 or 4S, the capital account would incorporate the same. If however, assessee are filing ITR-1, 2 or 3, there is no requirement to reflect the same.

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Dearness Allowance Rate w.e.f. from 01.07.2012 in Maharashtra with Expected 7% D. A. from July-12

 The Dearness Allowance Rates in Maharashtra for 4th Pay, 5th Pay and 6th Pay Commission which are applicable to State Employee, Non-Govt. Employee, Aided Employee whose salary drawn by Maharashtra State Government. From Time to time, we updated all latest information for Employee and analyze the Resolutions, which passed by the Government.


The latest updated Dearness Allowance Rates are as follows:

DATE	D.A. RATES	PAY COMMISSION
01/01/1994	104.00%	D.A. RATES AS PER 4TH PAY COMMISSION
01/07/1994	114.00%
01/01/1995	125.00%
01/07/1995	136.00%
01/01/1996	148.00%
01/07/1996	159.00%
01/01/1997	170.00%
01/07/1997	182.00%
01/01/1998	190.00%
01/07/1998	203.00%
01/01/1999	213.00%
01/07/1999	218.00%
Note: The 5th Pay Commission was announced and implemented on 01 Jan. 1996.
01/01/1996	0.00%	D.A. RATES AS PER 5TH PAY COMMISSION
01/07/1996	4.00%
01/01/1997	8.00%
01/07/1997	13.00%
01/01/1998	16.00%
01/07/1998	22.00%
01/01/1999	32.00%
01/07/1999	37.00%
01/01/2001	38.00%
01/10/2001	41.50%
01/04/2002	44.50%
01/08/2003	55.00%
01/06/2004	61.00%
D. A. Merge 50% in Basic Pay as "D.P." from 01.08.2004
01/08/2004	50% + 11%
01/04/2005	50% + 14%
01/07/2005	50% + 21%
01/05/2006	50% + 24%
01/09/2009	50% + 29%
01/04/2007	50% + 35%
01/07/2007	50% + 41%
01/01/2008	50% + 47%
01/07/2008	50% + 54%
01/01/2009	50% + 64%
01/07/2009	50% + 73%
01/06/2010	50% + 87%
01/11/2010	50% + 103%
01/05/2011	50% + 115%
01/10/2011	50% + 127%
Note: The 6th Pay Commission was announced and implemented on 01 Jan. 2006.
01/01/2006	0.00%	D.A. RATES AS PER 6TH PAY COMMISSION Coming Soon (7% D.A. Increases)
01/07/2006	2.00%
01/01/2007	6.00%
01/07/2007	9.00%
01/01/2008	12.00%
01/07/2008	16.00%
01/01/2009	22.00%
01/07/2009	27.00%
01/06/2010	35.00%
01/11/2010	45.00%
01/05/2011	51.00%
01/10/2011 01/01/2012 01/07/2012	58.00% 65.00% 72.00%

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Dis-Allowance Interest Deductions u/s. 36(i)(iii) of Income Tax Act.

Income Tax Department Disallowance Interest Deductions u/s 36(1)(iii)(proviso) which is applicable to extension of existing business and not to setting up altogether different or new business as per below terms:

• Proviso to section 36(1)(iii) provides that no interest paid shall be allowed as deduction in respect of capital borrowed for acquisition of an asset for extension of existing business for any period beginning from the date on which the capital was borrowed for acquisition of the asset till the date on which the asset was first put to use.

• In this provision the reference is first to the existing business and then to its extension. It does not refer to setting up an altogether different or new business.

• In the absence of any specific statutory meaning to the expression 'extension of existing business', one has to go by its meaning as understood in common parlance.

• Assessee shifting its business from rented office to its own Office premises acquired with borrowed funds is extension of existing business within the meaning of proviso to section 36(1)(iii) The instant case is of 'extension of existing business' and not that of setting up of a new business, inasmuch as by having its own premises and doing the same business, the assessee will now be in position to carry on its operation at a much wider scale in a hassle free manner. This would obviously result in extension of its existing business.

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How much Medical Allowance getting per month is taxable or exempt from income Tax?

It is a common demand of Pensioners who are getting Medical Treatment as huge amount per month that how much Medical Allowances are taxable or exempt from Income Tax.
In this regard the question is raised about the income tax treatment of medical allowances / reimbursement in the hands of the employee. For the mass benefit, we are summarizing the income tax implications in the hands of employee on the medical expenses reimbursement for medical facilities in India.

1. The fixed medical allowance given to an employee is taxable.

2. Medical reimbursement done to an employee by an employer is not taxable in the hands of an employee, if treatment of the employee or his family member is done in any of the following hospitals:
a] Hospital maintained by an Employer
b] Hospital maintained by Central Government or State Government or Local Authorities
c] Hospital approved by Government for its employees
d] For certain prescribed diseases/ailment, hospital approved by the Chief Commissioner of Income Tax.
The reimbursement in (a) to (d) shall be tax free without any upper ceiling or cap.

3. In respect of reimbursement of medical expenses reimbursement done to an employee for treatment in any hospital other than those covered in (a) to (d) above, there is a maximum cap of Rs. 15,000/-.

With above basic idea the reply of the queries are as under:

a. In general, Medical reimbursement up to Rs. 15,000/- is tax free. There is no bar of having an allopathic treatment only for claiming an exemption. Exemption can also be claimed for Homeopathic Medical treatment.

b. Fixed medical allowance is taxable. Subject to maximum cap of Rs. 15,000/-, reimbursement of medical expenses supported by bills / vouchers are exempt from income tax.

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Extend Amount of Allowances of Transport and Blind/Handicapped Per Month Under Clause 14 of Section 10.

Many salaried employees are getting Transport Allowance but they are not aware about the rule of exemption from Income Tax under clause (14) of Section 10. This type of allowance can be paid by Employer to meet out the expenditure for the purpose computing between the residence to duty place etc.  Detail of rule regarding Transport Allowance, Blind/Handicapped Allowance with extent limit are given as under :

Sr.No	Name of Allowance	Name of Allowance  Allowance is   exempt	Extent to which Allowance is   exempt
46[10.	Transport allowance granted to an employee 47[other than an employee referred to in serial number 11] to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty	Whole of India	Rs. 800 per month.]
48[11.	Transport allowance granted to an employee, who is blind or orthopaedically handicapped with disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty	Whole of India	Rs. 1,600 per month.]

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Exemption of expenditure of employers incurred on the to and fro journeys of the employee from the residence to the office w.e.f. 1/4/2007

Any benefit or amenity in the nature of free or subsidised transport or any such allowance provided by the employer to his employees for journeys by the employees from their residence to the place of work or such place of work to the place of residence shall not form a part of fringe benefits for levy of Fringe Benefit Tax. The provision takes effect from 1st April, 2007 and applies in relation to the assessment year 2007-2008 (previous year 2006-2007) and subsequent years.

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Do you know : Regulation of claims to pay, allowances, leave and pension

Friends,

A government servants claim to pay and allowances is regulated by the rules in force at the time in respect of which the pay and allowances are earned; to leave by the rules in force at the time the leave is applied for and granted; and to pension by the rules in force at the time when the Government servant retires or is discharged form the service of Government:

Provided that, if during his service, change disadvantageous to him are introduced in the rules, to which he became subject on entry into the service of Government, his pension shall not be less than that which would have been admissible but for the introduction of such changes.

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Arrears of pay etc. to be credited to the Fund

Arrears of pay etc. to be credited to the Fund - Notwith-standing anything contained in these rules, the arrears of pay and allowances which may accrue, at any time, to a subscriber as a result of the general revision of pay or of the rates of allowances shall, if the State government so direct, be credited to his account in the fund.

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Date from which pay and allowances take effect

Subject to any exceptions specifically made in these rules, a Government servant commences or ceases to be entitled to the pay and allowances of a post with effect from the date on which he assumes r relinquishes charges of the duties of that post, if he assumes or relinquishes charges of those duties in the forenoon of that day; otherwise from the following pay.

Exception:
For a period of not more than three days spent by a direct recurit to the post of a Deputy Engineer in taking over charge of his post on first appointment, he should be granted his grade pay excluding any special pay or allowance (but including dearness allowance) to which he would be entitled on assumption of complete charge.)

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