" IRS OFFICERS PROMOTED FROM THE GRADE OF SUPERINTENDENT OF CENTRAL EXCISE ARE ALSO MEMBERS OF AIACEGEO. THIS IS THE ONLY ASSOCIATION FOR SUPERINTENDENTS OF CENTRAL EXCISE AND IRS OFFICERS PROMOTED FROM THE GRADE OF SUPERINTENDENT OF CENTRAL EXCISE THROUGH OUT THE COUNTRY . President Mr. A. Venkatesh and SG Mr. Ravi Malik.

Thursday, 20 September 2018

Retrospective implementation of pay scale of Central Excise Superintendents at par with NCB Superintendents


ALL INDIA ASSOCIATION OF CENTRAL EXCISE
GAZETTED EXECUTIVE OFFICERS
President:                                          Address for communication:                                       Secretary General:
A. Venkatesh                             240, Razapur, Ghaziabad-201001 (U.P.)                                              Ravi Malik
Mob.7780255361       mail Id:ravimalik_sweet@yahoo.comSite: cengoindia.blogspot.in      Mob.9868816290
Vice Presidents: Apurba Roy, P. C. Jha (East); A. K. Meena, SomnathChakrabarty (west); Ashish Vajpayee, Ravi Joshi (North); B. Pavan K. Reddy (South); K.V. Sriniwas, T. J. Manojuman (Central) Joint Secretaries: Ajay Kumar, R. N. Mahapatra (East); B. S. Meena, SanjeevSahai (West); Harpal Singh, Sanjay Srivastava (North); M. Nagraju, P. Sravan Kumar (South); Anand Kishore, AshutoshNivsarkar (Central)
Office Secretary: C. S. SharmaTreasuer: N. R. MandaOrganising Secretary: SoumenBhattachariya
(Recognised by G.O.I., Min. of Fin. vide letter F.No. B. 12017/10/2006-Ad.IV A Dt.21.01.08)
Ref. No. 256/AIB/NCB/18                                                                          Dt. 20.09.18
To,
The Chairman, CBIC,
North Block, New Delhi.
Sub: Retrospective implementation of pay scale of Central Excise Superintendents at par with NCB Superintendents.
Sir,
            Kindly refer to the various requests of the Association on the subject matter.
2. It is submitted with due regards that the pay scale of the Superintendents of Narcotics Control Bureau was revised to Rs. 7500-12000/- from Rs. 6500-10500/- w.e.f. 01.01.96 with all consequential benefits vide U.O. No. 169/1/2005-IC dt. 11.04.05 of the Department of Expenditure leading to the issuance of Order F. No. II/2(38)/2004-Estt. dt. 20.04.05 by the Narcotics Control Bureau whereas the pay scale of the Superintendents of Central Excise was revised to Rs. 7500-12000/- from Rs. 6500-10500/- prospectively w.e.f. 21.04.04, i.e., from the date of issuance of the order vide O.M. No. 6/37/98-IC dt. 21.04.04.
            3. It is worth to submit that the Superintendents of Narcotics Control Bureau were granted the retrospective benefit despite of the fact that their pay scale was revised even after the revision of pay scale of Superintendents of Central Excise based on the parity and precedent of Central Excise Superintendents. It is further submitted that the Superintendents in Narcotics Control Bureau were also granted the non-functional time scale on completion of 4 years of service based on the parity and precedent of the Superintendents of Central Excise.  
4. Further, there exists an established parity and relativity between the Superintendents of NCB (Narcotics Control Bureau) and Superintendents of Central Excise as the nature of duties, mode of recruitment, functions and responsibilities of these posts are the same. The Superintendents of Central Excise are also working as Superintendents in NCB since the creation of NCB. NCB was also a part of CBIC under the Department of Revenue and remained its part till 18.02.03. The Superintendents of NCB were sharing common seniority with the Superintendents of Central Excise for promotion to the Group A post of Asstt. Commissioner till 18.02.03. The Allocation of Business Rules, 1961 were amended vide Notification No. I/22/1/2003-CAB dt. 18.02.03 [S.O. 193(E)] to include the NCB in the Ministry of Home Affairs. Even after that, NCB is being monitored by the CBIC/Department of Revenue and the Superintendents of Central Excise are till now performing their duties as Superintendents of NCB.
5. The mode of recruitment of the Inspectors in CBIC and Intelligence Officers in NCB is also common. The posts of Superintendents in CBIC and NCB are also filled-up through promotion from the Inspectors and Intelligence Officers. The High Power Committee formed by the then Finance Minister also accepted that the Superintendents of Central Excise and the Superintendents of NCB are at par. Further, the Sixth Pay Commission had categorically observed vide Para 7.15.20 of its report that the duties & responsibilities attached to these posts whether in Central Excise or in the Narcotics Control Bureau are similar.
            6. Thus, the non-grant of retrospective revision of pay scale to the Central Excise Superintendents is not justified as the grave anomaly has arisen on account of the different dates of revision prescribed by the Department of Expenditure for different categories of employees. If the pay scale of the Superintendents of NCB was revised w.e.f. 01.01.96 by the Department of Expenditure, the prospective revision of pay scale from 21.04.04 for the Superintendents of Central Excise is gross injustice to them.
7. In view of the above, it is requested to give the retrospective effect to the enhanced pay scale of the Central Excise Superintendents at par with the Superintendents of NCB.
            Thanking you,
Yours faithfully,

(RAVI MALIK),
Secretary General.

Wednesday, 19 September 2018

All About Central Government Employees Group Insurance Scheme – CGEGIS

What is Central Government Employees Group Insurance Scheme ? How CGEGIS works ? 
Central Government Employees Group Insurance Scheme (CGEGIS): Ministry of Finance
Central Government Employees Group Insurance Scheme (CGEGIS) came into force from 1st January,1982. The scheme provides for two fold benefit, viz., (1) insurance cover to help their families and (2) lump sum payment to augment their resources on retirement.
Details of Central Government Employees Group Insurance Scheme (CGEGIS)
ParticularsDescription
Name of the SchemeCentral Government Employees Group Insurance Scheme (CGEGIS)
Sponsored byCentral Government
Funding PatternThe scheme has two funds namely (1) Insurance Fund and (2) Savings Fund. A portion of the subscription is credited to Insurance Fund and the other portion to the Savings Fund in the ratio of 3:7. The Savings Fund will earn interest at the prescribed rate to be compounded quarterly.
Ministry/DepartmentDepartment of Expenditure
DescriptionCentral Government Employees Group Insurance Scheme (CGEGIS) came into force from 1st January, 1982. The scheme provides for two fold benefit, viz., (1) insurance cover to help their families and (2) lump sum payment to augment their resources on retirement.
BeneficiariesIndividual, Family
Benefits
Benefit TypeMaterial
Eligibility criteriaAll the employees who had entered Central Government Service after 1st November,1980 will be compulsorily covered under the scheme from the date it came into force, i.e. from 1st January,1982.
How to AvailThe employees will be enrolled as members of the scheme only from 1st January every year. If an employee enters service on or after 2nd January in any year, he will be enrolled as a member only from 1st January of the next year.
Validity of the Scheme
Introduced On01 / 01 / 1982
Valid Upto12 / 11 / 2011
 CENTRAL GOVERNMENT EMPLOYEES’ GROUP INSURANCE SCHEME, 1980.
5.1 The Scheme, Central Government Employees’ Group Insurance Scheme (CGEGIS)
came into force from 1st January,1982. This scheme provides for the Central Govt. employees the two fold benefit viz. (1) insurance cover to help their families and (2) lump sum payment to augment their resources on retirement.
5.2 The scheme has two funds namely (1) Insurance Fund and (2) Savings Fund. A portion of the subscription is credited to Insurance Fund and the other portion to the Savings Fund in the ratio of 3:7. The Savings Fund will earn interest at the prescribed rate to be compounded quarterly.
5.3 All these
employees’ who had entered Central Government Service after 1st November,1980 will be compulsorily covered under the scheme from the date it came into force i.e. from 1st January,1982. The employees will be enrolled as members of the scheme only from 1st January every year. If an employee enters service on or after 2nd January in any year, he will be enrolled as a member only from 1st January of the next year. However, he will be entitled to insurance cover from the actual date of entry of service till the end of that calendar year by paying monthly subscription of Rs. 5/- p.m. as premium for every Rs. 15,000/ – of the insurance cover.
Similarly, on regular promotion of a member of a lower Group to a higher Group after 1st January in a year, his subscription will be raised from the 1st January of the next year.
Note :- If an employee once admitted to a higher Group is subsequently reverted to the lower Group for one reason or the other, he will continue to subscribe at the same rate as that of higher Group.
5.4 Contract employees, persons on deputation from State Government Public Sector Undertakings, or other autonomous organisations locally recruited staff in the Missions abroad, casual labourer, part-time and ad-hoc employees will not be covered by the scheme. It will also not apply to persons recruited in the Central Government after attaining the age of 50 years.
5.5 Re-employed Defence personnel availing of the extended insurance cover under the Group Insurance Scheme applicable to the members of Armed Forces shall not be eligible to become members of this Scheme until expiry of the extended insurance cover.
5.6 Subscription at the appropriate rate should be recovered by the DDO from each member every month irrespective of whether the member is on duty, leave or under suspension. In the case of absence on Extra Ordinary leave, subscription due should be recovered in arrears in not more than 3 instalments after the member rejoins duty, along with appropriate interest thereon. In the event of death of a member during Extra-ordinary leave, the DDO should recover arrears in subscription along with interest, from the payment to the nominee admissible under the scheme.
Note:- Subscription is payable till the end of service including the month in which an employee retires, dies or is removed from service. If an employee dies during a month before recovery of subscription for that month, his dues will be paid after deducting the subscription.
5.7 In the case of members proceeding on foreign service, the recovery of subscription would be watched by the PAO concerned in the same manner as recovery of leave salary and pension contributions is watched.
5.8 The Head of Office should obtain Nomination(s) in Form 7 or Form 8, as the case may be, from all members without delay, and after counter signature, have them pasted in their service books.
5.9 The Head of Office should ensure that Group-wise register of members is maintained in Form 9 and kept up-to-date. This register shall be sent to the DDO concerned once a year to verify whether appropriate subscription are being recovered from all employees who have joined the Insurance Fund or both the Insurance Fund and the Savings Fund under the Scheme and to record a certificate to this effect.
Central Government Employees Group Insurance Scheme (CGEGIS) Rules Eligibility Table after 7th Pay Commission
Many central government employees get a wide range of benefits from the Central Government Employees Group Insurance Scheme (CGEGIS). A portion of monthly contribution from every employee of offices that come under the central government throughout the service and the overall interest for these contributions plays the major role in the CGEGIS.
Below listed table describes the basic things about the central government CGEGIS plan.
S. NoThings needed to know about Central Government Employees Group Insurance Scheme (CGEGIS)Detailed Explanation
1The Insurance Scheme for government employees sponsored by whom?The Central Government of India sponsors for CGEGIS, which handles by Department of Expenditure.
2Who are all the beneficiaries under this CGEGISAll central government employees and their respective family members are eligible to get merged with this insurance scheme
3What are the monthly deduction details under this CGEGISAt present central government employees getting deduction of Rs.120 from their monthly salary and it is be increased to Rs. 5000 as per proposal place by central government
4Insured amount under CGEGISCurrent the insured amount is Rs. 1,20,000 and government plans to increase the sum amount to Rs. 50,00,000
 Once people have entered the central government service, they have to apply for this scheme through the Form No. 4 to the head of office. The head of office is responsible for sanctioning the subscriber’s accumulation payment in the segment of Savings Fund along with interest. This fund can be received by the central government employees after their retirement.
In the event of death of central government employees, the CGEGIS is available to their family. All payments associated with this insurance scheme are as per the Table of Benefit at all times. Central government employees have to keep focusing on the Table of Benefit and make an informed decision about how they can make use of this CGEGIS.
Central Government Employees Group Insurance Scheme (CGEGIS) Important Factors:
  • There are two types of funding patterns associated with the CGEGIS. The first type is insurance fund. The second type is savings fund.
  • The ratio in which a portion of the central government employees salary is allotted for the insurance and savings funds is 3:7.
  • Each contribution to the savings fund earns interests at a certain rate specified by the central government. The interest rate is compounded quarterly.
  • The Department of Expenditure manages every aspect of the CGEGIS from the beginning to end of this scheme for every employee of the central government offices.
CGEGIS Table 1 2016 – Subscription of Rs.10 / month per unit from 1.1.1982 to 31.12.1989
Eligibility to join CGEGIS:
Every regular employee of the central government is eligible for the CGEGIS. Employees who are joining the service on any day and month of a year are considered as the member of CGEGIS from the January 1 of a year they joined.
On the other hand, they will be entitled for this insurance cover from the actual date of joining the service to the end of a year. They will be fully qualified member of this insurance scheme from the January 1 to the next year.
Bear in mind that re-employed defense personnel are not eligible for the CGEGIS until the expiry of insurance cover from the Group Insurance Scheme for Armed Forces.Once they get their existing insurance cover expired, they can meet the requirements for the CGEGIS easily.
Benefits under CGEGIS:
  • There are many benefits for central government employees by the CGEGIS. The following details explain these benefits.
  • The amount of contributions to the savings fund together with the overall interest will be paid to the central government employee when they leave their job or retire.
  • Nominee or hires of the central government employees will receive the amount of insurance cover from this group belonged on the date of death and savings fund’s accumulation in case of the death of employees.
  • If central government employees die before they were enrolled as members of CGEGIS, nominee or heirs of these employees will get the insurance amount only.
  • Central government employees obtain housing loans by assigning their accumulation in the saving fun and the insurance cover. They cannot withdraw, loan or advance from their savings fund and insurance fund.
Central Government Employees Group Insurance Scheme (CGEGIS) change after 7th Pay Commission
  • The 7th pay commission enhanced the CGEGIS that has remained unchanged for a long time. The latest enhancements in the CGEGIS attract and satisfy every employee of the central government.
  • The level of employee from 1 to 5, 6 to 9 and 10 and above paid 30, 60 and 120 per month for the insurance amount 30000, 60000 and 120000 respectively so far.
  • The 7th pay commission proposed that the level of employee 1 to 5, 6 to 9 and 10 and above can pay 1500, 2500 and 5000 per month for the insurance amount 1500000, 2500000 and 5000000 respectively hereafter.
CGEGIS Table of Benefits for previous period

Monday, 17 September 2018

Income Tax 2018-19 – How Various Income Earned By Salaried Employees Treated Under Income Tax ?

Income Tax 2018-19 – How Various Income Earned By Salaried Employees Treated Under Income Tax ?

Income Tax 2018-19 – How Salary Income such as Salary, Gratuity, Leave Encashment, and allowances such as children education allowance, transport allowance, etc are treated under Income Tax provisions ?

1. Medical Facility:-

Treatment of medical facility provided by the employer to employee is as follows:
Medical facility In India:
HospitalNature of medical facilityExpenditureIs chargeable to tax?
Maintained by employerAnyIncurred by the employerNot chargeable to tax with no monetary ceiling
Maintained by:-
  • Central or State Govt.
  • Local authority
  • Any other person approved by Govt.
AnyIncurred or reimbursed by employerNot chargeable to tax with no monetary ceiling
Approved by chief commissionerFor treatment of prescribed diseases given in Rule 3A(2)Incurred or reimbursed by employerNot chargeable to tax with no monetary ceiling
Health insurance policyMedical insurance premium paid or reimbursed by employerNot chargeable to tax with no monetary ceiling
Maintained by any other personAnyIncurred or reimbursed by employerNot chargeable to tax upto Rs. 15000 per assessment year (This exemption is not applicable from A.Y 2019-20)
Note: Fixed medical allowance given by employer to employee is fully chargeable to tax.
Medical facility outside India:Expenditure incurred by the employer on medical treatment of employee is taxable subject to the conditions given below:-
Perquisites not chargeable to taxCondition to be satisfied
Medical treatment of employee or any member of family of such employee outside IndiaExpenditure shall be excluded from perquisites only to the extent permitted by RBI.
Cost of travel of the employee or any member of his family or any one attendant who accompanies the patient in connection with treatment outside IndiaExpenditure shall be excluded from perquisites only in the case of an employee whose gross total income as computed before including therein the expenditure on travelling does not exceed Rs. 2,00,000
Cost of stay aboard of the employee or any member of the family for medical treatment and cost of stay of one attendant who accompanies the patient in connection with such treatmentExpenditure shall be excluded from the perquisites only to the extent permitted by RBI.

​​2. Rent Free Accommodation:-

Rent free accommodation given by employer to employee shall be treated as perquisites in hands of employee and income tax would be levied in the manner specified below:-
Calculation of perquisite value, is given hereunder:
Accommodation provided by:-Perquisite value in case of Unfurnished AccommodationPerquisite value in case of Furnished Accommodation
Government EmployerLicense fees determined by the Central or state government minus Rent paid by employee (if any)License fees determined by the central or state government minus rent paid by employee and lease charge of furniture or 10% depreciation of furniture as the case may be.
Non-Government Employer (accommodation is owned)
  1. If population (*) exceed 25 Lakhs : 15% of salary minus rent paid by employee
  2. If population (*) exceeds 10 lakhs but up to 25 lakhs: 10% of salary minus rent paid by employee.
  3. If population (*) up to 10 lakhs : 7.5% of salary minus rent paid by employee
* Population as per 2001 census
Value of perquisites as calculated in case of unfurnished accommodation shall be increased by 10% p.a. cost of furniture or actual rent of furniture minus amount paid by employee.
Non-Government employer (accommodation is taken on lease)Rent paid by the employer or 15% of salary (whichever is lower) minus rent paid by employer.Value of perquisites as calculated in case of unfurnished accommodation shall be increased by 10% p.a. cost of furniture or actual rent of furniture minus amount paid by employee.
Accommodation provide in a HotelNA24% of salary or lease charges payable in hotel (whichever is lower) minus amount paid by employee.

 3. Transport Allowance :-
Transportation allowance granted to the employee to meet his expenditure for the purpose of commuting between place of his residence and the place of duty is exempt upto Rs. 1,600/- per month. (This exemption is not applicable from A.Y 2019-20)
Further, if employee who is blind or deaf and dumb 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 duty the Transportation allowance is exempt upto Rs. 3,200/- per month.

4. Children education and hostel allowance:-

Children education allowance (by whatever name called) is exempt upto Rs. 100/- per month per child up to a maximum of two children.
Further, any allowance granted to an employee to meet the hostel expenditure on his child (whatever name called) is exempt upto Rs. 300/- per month per child up to a maximum of two children.

5. House Rent Allowance ​:-

House rent allowance received by an employee is taxable. However exemption is available under section 10(13A). The exemption is based on certain set of conditions.
Exemption for House rent allow​ance is regulated by rule 2A. The least of the following is exemption from tax:
a. an amount equal to 50 per cent of salary, where the residential house is situated at Bombay, Calcutta, Delhi or Madras and an amount equal to 40 per cent of salary where the residential house is situated at any other place;
b. house rent allowance received by the employee in respect of the period during which the rental accommodation is occupied by the employee during the previous year; or
c. the excess of rent paid over 10 per cent of salary.
The taxable HRA is a part of income from salaries. While filing Income-tax return, the same should be shown under the income from salary.​

​​6. How Deductions from Salary Income are allowed under Chapter VI-A (Section 80 C to 80U)​:-

​​Section 80C to 80U provides certain deductions which can be claimed from Gross Total Income (GTI). After claiming these deductions from GTI, the income remaining is called as Total Income. In other words, GTI less Deductions (under section 80C to 80U) = Total Income (TI). Total income can also be understood as taxable income. Following table gives a better understanding of the difference between GTI and TI:
Computation of gross total income and Taxable Income
ParticularsAmount
Income from salaryXXXXX
Income from house propertyXXXXX
Profits and gains of business or professionXXXXX
Capital gainsXXXXX
Income from other sourcesXXXXX
Gross Total IncomeXXXXX
Less : Deductions under Chapter VI-A (i.e. under ​section 80C to​​​ 80U)(XXXXX)
Total Income (i.e., taxable income)XXXXX
7. ​​A Brief on calculation of Tax on Income:
After ascertaining the total income, i.e., income liable to tax, the next step is to compute the tax liability for the year. Tax liability is to be computed by applying the rates prescribed in this regard. For rates of tax, refer “Tax Rate” section. Following table will help in understanding the manner of computation of the total tax liability of the taxpayer.
Computation of total income and tax liability for the year
ParticularsAmount
Income from salaryXXXXX
Income from house propertyXXXXX
Profits and gains of business or professionXXXXX
Capital gainsXXXXX
Income from other sourcesXXXXX
Gross Total IncomeXXXXX
Less : Deductions under Chapter VI-A (i.e., under section 80C to 80U))(XXXXX)
Total Income (i.e., taxable income)XXXXX
Tax on total income to be computed at the applicable rates (for rates of tax, refer “Tax Rate” section)XXXXX
Add: SurchargeXXXXX
Tax Liability After SurchargeXXXXX
Add: Education cess @ 2% on tax liability after surcharge (not applicable from A.Y 2019-20)XXXXX
Add: Secondary and higher education cess @ 1% on tax liability after surcharge (not applicable from A.Y 2019-20)XXXXX
Add: Health and education cess @ 4% on tax liability after surcharge (applicable from A.Y 2019-20)XXXXX
Tax liability before rebate under  sections 90, 90A and 91 (if any) (*)XXXXX
Tax liability for the year before pre-paid taxesXXXXX
Less: Prepaid taxes in the form of TDS, TCS and advance tax(XXXXX)
Tax payable/RefundableXXXXX
(*) Rebate under sections 90, 90A and 91 is available to a taxpayer in respect of double taxed income, i.e., income which is taxed in India as well as abroad.
Note: For provisions relating to Minimum Alternate Tax (MAT) in case of corporate taxpayers refer tutorial on “MAT/AMT”.
Click here to view prevalent tax rates

8. Income from house property:-

Section 22 of the Act is the charging section for taxing any income under the head “Income from house property”.
The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him, the profits of which are chargeable to income-tax shall be chargeable to income-tax under the head “Income from house property”
Manner of computation of income from house property:
Gross annual valueXXXX
Less:- Municipal taxes paid during the yearXXXX
Net Annual Value (NAV)XXXX
Less:- Deduction under section 24
• Deduction under section 24 (a) @ 30% of NAVXXXX
• Interest on borrowed capital under section 24 (b)XXXX
Income from house propertyXXXX

9. Relief under section 89:-

An employee can claim relief under section 89 in respect of
  • Arrears of salary received by an employee are taxed in the year of receipt if the same were not taxed earlier on due basis.
  • Amount of commuted pension which is not exempt from tax
  • Leave salary
  • Gratuity
  • Compensation received on termination of employment/ voluntary retirement
Under section 89, read with Rule 21A(2), an employee can claim relief in respect of arrears of salary.
Relief can be computed in the following manner:
Step 1: Calculate total tax liability (including surcharge and cess, if any) on the total income , including the additional salary of the previous year in which such salary is received.
Step 2: Calculate total tax liability (including surcharge and cess, if any) on the total income , excluding the additional salary of the previous year in which such salary is received.
Step 3: Find the difference between tax computed at (1) and (2) above.
Step 4: Calculate total tax liability (including surcharge and cess, if any) on the total income , including the additional salary of the previous year(s) to which such salary relates to
Step 5: Calculate total tax liability (including surcharge and cess, if any) on the total income , excluding the additional salary of the previous year(s) to which such salary relates to.
Step 6: Find the difference between tax computed at (4) and (5) above.
Relief undersection 89 is the excess of tax computed at Step 3 over tax computed at Step 6. No relief is available, if tax computed at Step 3 is less than tax computed at Step 6.
If the additional salary pertains to more than one previous year, then relief shall be computed in above manner by spreading such salary over the previous years to which such salary pertains to.
Motor Car Facility:-
Value of perquisite in respect of motor car is determined as follows:
  • Value of perquisites if running and maintenance expenses met by the employer in respect of a car owned by the employee.
  • Value of perquisite in respect of motor car provided by the employer (expenditure on running and maintenance of motor car are met by the employer)
  • Value of perquisite in respect of motor car provided by the employer (expenditure on running and maintenance of motor car are met by the employee)
  • Value of perquisite in respect of perquisite arising on account of running and maintenance expenditure met or reimbursed by the employer in respect of any automotive conveyance (other than car) owned by the employee. 

10. How Concessional or Interest free loan granted by Employer is treated under Income Tax?:-

The value of perquisite arising on account of interest free loan or concessional loan granted by the employer will be computed on the basis of the rate of interest on such loans charged by the State Bank of India as on the 1st day of the relevant previous year, in respect of loans for the same purpose advanced by it (i.e., State Bank of India). The value of perquisite will be determined as follows:
ParticularsInterest free loanConcessional loan
Interest on the respective loan computed on the basis of rate of interest on such loan charged by State Bank of India prevailing on the first day of the previous yearXXXXXXXXXXXX
Less: Amount recovered from the employee for the respective loanXXXXXXXXXXXX
Perquisite in respect of interest free or concessional loansXXXXXXXXXXXX
Interest shall be computed on monthly basis by considering maximum outstanding monthly balance.

11. Should I Pay Income Tax on Gratuity ?

Tax treatment of gratuity can be classified as follows:
(A) Gratuity received by Government employees and employees of local authority [Section 10(10)(i)] – In case of a Government employee, any death-cum-retirement gratuity received is wholly exempt under Section 10(10)(i). It should be noted that employees of statutory corporation will not fall under this category.
(B) Gratuity received by non-Government employees : This category will further be classified as follows :
(1) Exemption in respect of gratuity in case of employees covered by the Payment of Gratuity Act, 1972. [Section 10(10)(ii)]
Exemption in this case will be lower of the following amounts :
1. 15 days’ salary (*) × years of service
2. Maximum amount specified by the Central Government, i.e., Rs. 10,00,000 / Rs. 20,00,000 * .
3. Gratuity actually received.
(2) Exemption in respect of gratuity in case of employees not covered by the Payment of Gratuity Act, 1972. [Section 10(10)(ii)]
Exemption in respect of gratuity will be least of the following :
1. Half month’s average salary for each completed year of service, i.e.,
[Average monthly salary (**) × ½] × Completed years of service.
2. Maximum amount specified by the Central Government, i.e., Rs. 10,00,000 / Rs. 20,00,000 *
3. Gratuity actually received.
* Rs. 20,00,000 ceiling limit is applicable if Gratuity is becoming payable on or after 29th March 2018.
**Average monthly salary is to be computed on the basis of average of salary for 10 months immediately preceding the month (not the day) of retirement.

12. Whether Leave Encashment amount is liable to Income Tax ?

Leave salary is taxable on the following basis:
Central or State Government EmployeeNon-Government Employee
As per section 10(10AA) (i), any amount received as cash equivalent of leave salary in respect of the period of earned leave at his credit at the time of retirement/superannuation is exempt from tax.As per section 10(10AA)(ii), leave salary is exempt to the extent of the least of the following:
(a) Cash equivalent of the leave salary in respect of the period of earned leave to the credit of an employee only at the time of retirement whether on superannuation or otherwise (earned leave entitlements cannot exceed 30 days for every year of actual service rendered for the employer from whose service he has retired); or
(b) 10 months “average salary”; or
(c) Rs 300000
(d) Leave encashment actually received at the time of retirement.
“Average salary” is to be calculated on the basis of average salary drawn during the period of 10 months immediately preceding the retirement/superannuation.
“Salary” means basic salary, dearness allowance if terms of employment so provide and it also includes commission based on fixed percentage of turnover achieved by an employee as per the terms of contract of employment.
“Leave salary received during employment” is chargeable to tax in the hands of Govt./Non-Govt. Employee. However, relief can be taken u/s 89.

13. Deduction allowed under Section 80U from the Income :-

DEDUCTION IN CASE OF A PERSON WITH DISABILITY
(1) Introduction: Deduction under section 80U is available to a taxpayer having disability or severe disability or suffering from autism, cerebral palsy or multiple disabilities.
(2) Eligible taxpayer
•  The taxpayer is an individual
•  The taxpayer can be citizen of India or foreign country
•  The taxpayer must be resident(may be ordinarily or not ordinarily resident). Deduction not available if he is non-resident for the relevant assessment year.
(3) Disabilities covered   •  Blindness
•  Low vision
•  Leprosy-cured
•  Hearing impairment
•  Locomotor disability
•  Mental retardation
•  Mental illness
•  Autism, cerebral palsy & multiple disability
(4) Other provisions
  • The taxpayer shall have to obtain certificate in Form No. 10-IA from medical authority where the person is suffering from disability.
  • If deduction is claimed under this section by taxpayer for himself, no deduction is available under section 80 DD to person on whom person suffering from disability is dependent.
  • Where the condition of disability requires reassessment, a fresh certificate needs to be obtained from the medical authority in order to claim the deduction after the expiry of period of original certificate.
(5) AMOUNT OF DEDUCTION TO A TAXPAYER SUFFERING FROM DISABILITY IS AS FOLLOWS…
Taxpayer suffering with disability of…..Amount of deduction available in rupees
  ➢  Less than 40%0
  ➢  More than or equal to 40% but less than 80%75000
  ➢  More than or equal to 80%125000

14. Deduction from Income under Section 80TTA:-

Deduction under Section 80TTA for Interest on Saving Account
Section 80TTA provides deduction up to Rs. 10,000 in aggregate to an assessee (being an individual or Hindu undivided family) in respect of any income by way of interest on deposits (not being time deposits) as follows:
Up to assessment year 2012-13
Rs.
From assessment year 2013-14
Rs.
Interest on savings account with a Bank, co-operative bank and Post office (deduction under section 80TTA)No deductionDeduction upto Rs. 10,000
Note: From A.Y 2019-20, the above deduction is not available in the case of senior citizen who is eligible to claim deduction under Section 80TTB.

15. Deduction under Section 80DD:-

​​DEDUCTION UNDER SECTION 80DD FOR MAINTENANCE/ MEDICAL TREATMENT OF DEPENDENT HANDICAPPED
(1) Introduction
Deduction under Section 80DD is available from Gross Total Income of a taxpayer in respect of maintenance/ medical treatment of a dependent person having disability or severe disability or suffering from autism, cerebral palsy or multiple disabilities.
(2) Prerequisites to claim deduction under Sec. 80DD
✓ Deduction is allowed for medical treatment/ maintenance of a dependent and not the tax payer himself;
✓ The taxpayer is not allowed this deduction if the dependent has claimed a deduction under section 80U for himself/herself.
✓ Dependent in case of an individual taxpayer means spouse, children, parents, brothers & sisters of the taxpayer. For HUF, dependent means any member of the HUF
✓ The Taxpayer should incur any of the following expenditures:
○ Option 1○ Option 2
Expenditure for the medical treatment(including nursing), training and rehabilitation of a handicapped dependentPaid or deposited under any scheme framed in this behalf by the Life Insurance Corporation or any other insurer, or the administrator or specified company approved by the Board in this behalf, for maintenance of handicapped dependent
✓ The amount of deduction is fixed based on the disability, irrespective of the amount incurred or deposited under Option 1 and/ or option 2.
✓ Certificate should be obtained in Form No. 10-IA from medical authority where the person is suffering from specified disability.
✓ Where the condition of disability requires reassessment, a fresh certificate needs to be obtained from the medical authority in order to claim the deduction after the expiry of period of original certificate.
(3) AMOUNT OF DEDUCTION
Dependent suffering from disability ofAmount of deduction in rupees
➢ Less than 40%0
➢ More than or equal to 40% but less than 80%75000
➢ More than or equal to 80%125000

16. Deduction under Section 80C:

Section 80C provides deduction to Individual/HUF in respect of various items like life insurance premium, investment in Public Provident Fund, investment in NSC, investment in notified units of mutual funds, deposit in Sukanya Samriddhi account, investment in mutual funds, amount paid for tution fees, repayment of principal component of housing loan, investment in Post Office Time Deposit Scheme, Senior Citizens Saving Scheme, etc.

17. Deduction in respect of medical insurance premium under Section 80D from Income:

Section 80D provides deduction to an individual or a HUF. In case of an individual, deduction is available in respect of medical insurance policy taken in his own name, or in the name his/her spouse, his/her parents and his/her dependent children. In case of HUF, the policy can be taken on the health of any member of such HUF.
Deduction can claim in respect of the following payments:
  • Medical insurance premium paid by assessee, being individual/HUF by any mode other than cash.
  • Any contribution made by assessee, being individual to Central Government Health Scheme or such other Scheme as may be notified by the Central Government.
  • Sum paid by assessee in cash being individual on account of preventive health check-up.
Deduction on account of medical expenditure on the health of a person who is super senior citizen * (senior citizen ** from the assessment year 2019-20) if medi-claim insurance is not paid on the health of such person.
* ‘Super senior citizen’ means an individual resident in India who is of the age of eighty years or more at any time during the relevant previous year.
** ‘Senior citizen’ means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.
From the A.Y 2019-20, In case of a single premium health insurance policies having cover of more than 1 year, the deduction under this section shall be allowed on proportionate basis for the number of years for which health insurance cover is provided.

18. Deduction on account of payment of life insurance premium under Section 80C:

The Quantum of deduction allowed in respect of Life Insurance Premium under Section 80C is restricted to 10% of sum assured.
Overall deduction u/s 80C (along with deduction u/s 80CCC & 80CCD(1)) allowed is up to Rs. 1,50,000.
Minimum holding period
Following is the minimum holding period in respect of certain investments, deposits, etc., prescribed above which should be kept in mind while claiming deduction under section 80C:
Nature of Investments/DepositsMinimum Holding Period
ULIP of UTI or LIC5 years
Life insurance policy2 years
Senior Citizens Saving Scheme and Post Office Time Deposit5 years
Principal Repayment of loan including Cost of Purchase/construction of residential house property5 years
If any of the aforesaid investments, subscriptions, etc., is terminated, sold, etc., before the minimum holding period specified above, then the deduction allowed in earlier years would be deemed as income of the previous year of termination, sale, etc. Further, no deduction will be allowed in respect of contribution, payment, etc., made towards such policy, units, etc. (i.e., which is terminated) during the year of termination.
In case of withdrawal during the life time of depositor from Senior Citizens Savings
Scheme or Post Office Time Deposit before the aforesaid period (i.e., before 5 years), the amount received on such withdrawal (excluding interest which is already taxed in earlier years) will be charged to tax in the year of withdrawal.​

19. How Interest on NSC (National Saving Certificate) is treated under Income Tax:-

Section 80C provides deduction of investment and interest accrued on NSC. Interest on NSC is taxable on annual accrual basis. Accrued interest on NSC is taxed in the hands of the receiver and the same will be treated as an investment during the year of accrual (except for last year) and will qualify for deduction under section 80C.​