7th Pay Commission: Good news for Central govt employees; Centre to pay higher allowances, arrears from January 2017

In a good news for central government employees, the government is planning to pay higher allowances and five months’ arrears according to the 7th Pay Commission recommendations from January, 2017.

7th Pay Commission: Good news for Central govt employees; Centre to pay higher allowances, arrears from January 2017

New Delhi, Nov 27: In a good news for central government employees, the government is planning to pay higher allowances and five months’ arrears according to the 7th Pay Commission recommendations from January, 2017. The government wants the situation to get normal following demonetisation drive before paying higher allowances and five months’ arrears under the 7th Pay Commission recommendations to its 4.8 million employees. Higher allowances and five months’ arrears under the 7th Pay Commission recommendations will be paid after Cabinet nod to ‘Committee on Allowances’ report.

According to Finance Ministry sources, Central government will have to pay the arrears of enhanced allowances this time because the enhanced allowances under recommendations of 7th Pay Commission have not been paid in August when the pay hike and its arrears were paid. The ‘Committee on Allowances’, headed by Finance Secretary Ashok Lavasa, on fatter allowances under the 7th Pay Commission recommendations is ready with its report. But the cash crunch post currency ban has forced the Finance Ministry to keep in abeyance the enhanced allowances till things normalize.

The entire country is facing a shortage of cash after the demonetisation of Rs 500 and Rs 1000 currency notes, which accounted for 86 per cent of all cash in the economy. The government is hopeful that situation will get normal after December 30 and it will be ready to pay enhanced allowances and five months’ arrears under the 7th Pay Commission recommendations to its employees.

The central government employees have been waiting for fatter allowance since July when the notification for the implementation of the 7th Pay Commission recommendations was issued. The 7th pay commission had recommended abolition of 51 allowances and subsuming 37 others out of 196 allowances, which was opposed by the central government employees’ unions. To resolve this issue, Union Finance Minister Arun Jaitley formed the ‘Committee on Allowances’ on July 22 for examination of the recommendations of 7th Pay Commission on allowances other than dearness allowance.

Once the ‘Committee on Allowances’ will submit its report to the Finance Ministry, it will be sent to the Cabinet for approval. Earlier we reported that the government has decided to stick to the recommendations of the 7th Pay Commission on basic pay and there will no no hike in basic pay or fatter allowances.

Government may reward tax payers

Government may reward tax payers

Demonetisation windfall: Government may reward tax payers:

Sources hint at tax breaks in Budget 2017-18

With demonetisation raising revenues for the government, Budget for 2017-18 may see an increase in income tax exemption limit for individual tax payers. It may also see a reduction in income tax rates.

“The monetary gains will be utilised for infrastructure development, but a part of it will also be used to spur demand in the economy and one way will be to give tax breaks to bonafide tax payers,” a top official said.

It may even be a Rs 5 lakh flat tax exemption for individual tax payers, and not other income tax rebates. The other possibility is that the government will increase the exemption from the current Rs 2.5 lakh, to Rs 3.5 lakh, and let some of the deductions continue. At present, Rs 2.5-5 lakh income is taxed at 10%, Rs 5-10 lakh at 20%, and above Rs 10 lakh at 30%. The government is currently working on various possibilities, and it will take sometime to zero-in on one, according to different sources in the government.

In case, the exemption is Rs 5 lakh, the income tax rates applicable could be 10% between Rs 5 lakh and Rs 10 lakh annual income, 20% between Rs 10 lakh and Rs 20 lakh income, and 30% on income over Rs 20 lakh, according to an official, who did not wish to be identified.

The industry too has demanded a cut in income tax rates, and a steep increase in exemptions in the wake of a windfall gain to the government after the demonetisation drive. Industry has also sought a cut in maximum tax rate of 30% on individual income to 25%.

Finance Minister Arun Jaitley had recently said that demonetisation will not only bring back the unaccounted wealth into the economic system, it will also pave way for tax relief to honest tax payers by bringing the rates down.

At present, there are various income tax exemptions for individual tax payers and the salaried class. These include house rent allowance exemption for the salaried class, income tax exemption on leave travel allowance, and exemption on encashment of leave. Transport allowance and children education allowance are also allowed income tax exemption for salaried employees up to a certain limit.

7th CPC: Pay Parity between Military and Civilian Personnel

7th CPC: Pay Parity between Military and Civilian Personnel

Press Information Bureau

Government of India

Ministry of Defence

25-November-2016 16:47 IST

Pay Parity between Military and Civilian Personnel

The 7th Central Pay Commission (CPC), an expert body constituted by the Government, gave its recommendations on emolument structure of government employees, including personnel belonging to Defence Forces, after due consultation with various stakeholders and thorough examination of various aspects involved. The Commission recommended separate Pay Matrix for Defence Forces after considering: (i)principles and philosophy adopted in devising the Pay Matrix for civilian employees; and (ii)some of the aspects in the rank structure unique to Defence Forces. The Government accepted the Commission’s recommendations on Minimum Pay, Fitment Factor, Index of Rationalization, Pay Matrices and general recommendations on pay with certain exceptions in Defence Pay Matrix, namely, (i)revision of Index of Rationalization of Level 13A (Brigadier) from 2.57 to 2.67; and (ii)addition of three stages in Level 12A (Lt Colonel), three stages in Level 13 (Colonel), and two stages in Level 13A (Brigadier).

As and when issues regarding anomalies in the pay of defence personnel are brought to notice, the same are examined by the Government, on case to case basis.

This information was given by Minister of State for Defence Dr. Subhash Bhamre in a written reply to Shri Sultan Ahmed and others in Lok Sabha today.

NAMPI/RAJ 

Write off education loans given to the poor and middle class family students who could not get employment

Write off education loans given to the poor and middle class family students who could not get employment 

Government has no Plan to write off education loans given to the poor and middle class family students who could not get employment. However, for the students belonging to economically weaker sections, an interest subsidy scheme on educational loans is in place. Under the scheme during the period of moratorium full interest subsidy is available for educational loans disbursed on or after 1st April, 2009.
The Indian Banks’ Association (IBA) has formulated a Model Educational Loan Scheme for adoption by banks. As per the scheme, Banks may also provide additional moratorium upto 6 months at a time taking into account spells of under-employment/unemployment during the tenure of the loan.

Government of India has launched a Credit Guarantee Fund Scheme for Education Loans (CGFSEL) wherein collateral free loan is given upto Rs.7.5 lakh. The fund provides guarantee against default in repayment of education loans to the extent of 75% of the amount in default.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

Press Information Bureau.

Labour Ministry - Nationwide campaign to open bank accounts

Nationwide Campaign from tomorrow to open bank accounts of all workers in both organized and unorganized sectors 

The Ministry of Labour and Employment in collaboration with Department of Financial services, the Ministry of Finance is launching a nationwide campaign to open bank accounts in respect of those workers in both organized and unorganized sectors who do not have one even today . Starting form 26th November 2016, special camps will be organized in every district at specific locations to facilitate the workers to open their bank accounts. Government has decided to pursue this path of digital transactions more vigorously than ever before. “We have already sent communications to all the state governments in this respect requesting their active cooperation.” this was stated by Shri Bandaru Dattatraya, the Minister of State (IC) for Labour and Employment here today. The Minister said that the team comprising of District Magistrates, Lead District Manager of the Bank and the Labour Officers of both Centre as well as State governments would decide the modalities of the camps including the locations within their districts and coordination with the banking channels.

Shri Dattatraya has called upon all the establishments, employers and the employees associations and everyone associated and seek their active involvement and cooperation to ensure that the needy workers are facilitated to access these camps and avail the services therein. The campaign will continue in the coming days through the concerned banks, their business correspondents and camps as required.

In order to facilitate financial inclusion and to ensure transparency in all financial transactions, the government launched its flagship scheme of Jan Dhan Yojna in September, 2014. More than 25 crore bank accounts have been created since then across the country thereby linking the working class to the mainstream of financial /banking activities. The DBT through this banking network has benefitted crores of poor citizens of the country.

Press Information Bureau.

Observance of Protest Week from 12th to 19th December 2016 by FNPO affiliates.

Observance of Protest Week from 12th to 19th December 2016 by FNPO affiliates.
Click the above link to view the circular.

Minutes of the Meeting held on 11th November, 2016

Minutes of the Meeting held on 11th November, 2016

No.CPAO/CO―ORD/(107)/2016-17/496

MINISTRY OF FINANCE, DEPARTMENT OF EXPENDITURE

CENTRAL PENSION ACCOUNTING OFFICE

TRIK00T -II, BHIKAJI CAMA PLACE, NEW DELHI-110066
Dated: 24.11.2016

Minutes of the Meeting

Please find enclosed herewith a copy of minutes of the Meeting held on 11th November, 2016 

at ll.00 AM at O/o CGA under the chairmanship of controller General of Accounts to review the

 various pension ― related issues requiring close monitoring by Pr.CCAs/CCAs/CAs for further 

necessary action.

(Vijay Singh)

Sr. Accounts Officer

Minutes of the meeting held on 11.11.2016 under the chairmanship of Controller General

 of Accounts at Mahalekha Niyantrak Bhawan, INA, New Delhi.

A Meeting was held on 11.11.2016 at 11.00 AM under the Chairmanship of Controller General 

of Accounts in the Conference Hall ‘Swasti’ Mahalekha Niyantrak Bhawan, Office of CGA, Block-E,

General Pool Office Complex, INA Colony, New Delhi to discuss pension related issues.

At the outset Chief Controller (Pension) welcomed all the participants. Controller General of 

Accounts in his opening remarks highlighted the need for quick processing of pension cases

 to avoid delays and prompt disposal of Pensioners’ grievances and advised all concerned 

CCAs/CAs that issues regarding pending grievances and delays in receipt of pension & 

revision cases from HOOs/DDOs should be raised in the Senior Officers’ Meetings 

chaired by respective Secretaries. He stressed that all Pr. CCAs/CCAs/CAs must use their

 dashboards provided by CPAO to monitor the disposal of grievances and uploading of lists

 of retiring employees and submission of pension cases.

List of participants is at Annexure-I.

Following agenda items were discussed and decisions taken:-

1. Agenda Item No. 1-A: Pending cases of revision under OM dated 6th April, 2016: 

Delinking of revised pension from qualifying service of 33 years:

It was observed that total 88,550 cases were due for revision. Out of that 61,778 cases

 were already revised. However, still 26772 cases (30%) were pending for revision. 

Out of these cases, 2551 2 cases (95%) were pending with 9 ministries/ departments 

i.e. Home Affairs (23,307), Atomic Energy, Prasar Bharti, CBEC, I&B, Agriculture, HIED, 

Civil Aviation and Supply. Vide various OMs issued by CPAO, concerned CCAs/CAs 

were requested to revise pending cases urgently. CGA directed to finalize all the pending 

cases within one month. PAO wise pendencies were reviewed specifically for MHA & 

Atomic Energy and they were advised to regularly review the status with their high pendency PAOs.

Action: All Concerned CCAs/ CAs

2. Agenda Item No. 1-B: Status of revision of pending Pre-2006 pension cases

It was observed that total 4617 cases of Pre-2006 (1,199 of Pre-2006 & 3,418 of Pre-90)

 were pending for revision in civil Ministries/Departments. Highest pendencies pertained to 

Home Affairs (963), Atomic Energy (442), CBEC, HRD, and Prasar Bharti. It was informed

 by the CCAs/CAs that these cases are pending due to non-availability of required information 

either with PAOs or with HOOs & Banks in spite of all out efforts made. Following points 

decisions were taken:

(i) CPAO to prepare fresh list of live pending cases on the basis of e-scrolls received

 which may reduce the number of pending cases. This list would be 

provided to the concerned Ministries/Departments to again review the pendency and 

check the availability of records. If records are not available even after this exercise,

 the certificate of non availability of records would be furnished by concerned CCAs/CAs

 to CPAO to enable it to take further necessary action. If any pensioner represents for

 revision of his/her pension in future the same would be revised on the basis of 

records provided by him/her subject to verification of the record.

(ii) The above list would also be provided to concerned pension disbursing banks to 

check the genuineness of these pensioners on the basis of KYC records available with

 them and get the relevant records required for revision for such pensioners. The banks

 will also be asked to furnish the copies of life certificates received from these pensioners

 to CPAO by 15th Feb, 2017.

Action: All Concerned CCAs/CAs, CPAO and Banks

3. Agenda Item Number-2: Delay in receipt of fresh PPOs

It was observed that only 29 percent of fresh PPOs were received in CPAO from 

PAOs before the date of retirement of government servants. All the CCAs/CAs present

 in the meeting informed that delay in finalizing fresh pension cases is because of late

 submission of pension papers by the HOOs to concerned PAOs. However, status of 

Atomic Energy was quite satisfactory where 85% fresh PPOs were received before 

the date of retirement. The Joint CA, Atomic Energy informed that they are regularly 

reviewing the status of receipt of fresh pension cases with the department and in case 

of any problem; they are holding the meetings with senior officers so that timely receipt of 

cases in PAOs may be ensured. CGA appreciated the efforts of Atomic Energy and advised

 other CCAs/CAs also to take up the matter regularly with concerned 

Administrative Authorities i.e. HODs/DOOs/DDOs for receiving the pension cases in 

PAOs as per prescribed time schedule and use the dashboards provided under WRPS

 to monitor the delays.

Action: All Concerned CCAs/ CAs

4. Agenda Item Number-3: Seeding of Aadhaar

Significant progress was observed in respect of Aadhaar Seeding in fresh PPOs by 

the Ministries/Departments as overall seeding percentage had reached 61%. 

Ministries/Departments where seeding percent was low were Home Affairs, 

PPG and Supply. In some Ministries/Departments, like Health & Family Welfare, 

HRD, Prasar Bharti and UD seeding was more than 90%, CCA, MHA was requested to

 ensure increasing the number of Aadhaar seeding in fresh PPOs as the low percentage

 of IVIHA had brought down overall percentage very significantly. Representative of

 PPG&P pointed out that low percentage of Aadhaar seeding in PPG&P was due to low 

Aadhaar seeding by Director of Accounts, Cabinet Secretariat (DACS) which uses PAO code

 of PPG&P but they are not in the administrative control of CA, PPG&P. On this issue, 

it was decided that while CPAO may take up the matter with DACS; PPG&P was also 

advised to coordinate with DACS to resolve this issue on regular basis. Most of the 

CCAs/CAs informed that PAOs are indicating Aadhaar numbers in fresh PPOs 

wherever the same is made available by the concerned HOOs and efforts are made to 

make it 100%.

Action: All Concerned CCAs/CAs

5. Agenda Item Number-4: Web Responsive Pensioners’ Service:

A. Grievances: Under WRPS, total 570 grievances were received, out of that 375 pertained

 to the concerned 15 ministries. Out of these 375 grievances, 70 grievances were replied 

back by PAOs to CPAO and 56 settled. 305 grievances were still pending with PAOs. 

CGA advised all concerned CCAs/CAs to review the status of pending grievances through 

WRPS on weekly basis and settle the grievances in time bound manner. CC (P) also

 requested CCAs/CAs to regularly review the pending grievances available under their

 dashboards under WRPS and ensure not to allow any pendency beyond 30 days. 

All the CCAs/CAs assured to regularly review the pending grievances and take necessary 

action to bring down the number of pending grievances.

Action: All Concerned CCA5/ CAs

B. Quarterly List of retiring Employees: Lists of only 1734 retiring employees were uploaded 

so far by the PAOs of concerned Ministries/Departments. Since annually about 

35 thousand of fresh pension cases are received in CPAO, this small number of uploading 

of lists showed that still either many PAOs are not uploading complete lists of retiring 

employees or not uploading at all.

To ensure the timely submission of list of retirees by the HOOs to the concerned PAOs

 the CCAs/CAs present in the meeting were advised to take up the matter with their HODs 

on regular basis to get the complete list of retiring employees wherever the same is 

not being provided by the HOOs. CGA advised CCAs/CAs to pay special attention to 

those PAOs where details of not even single employee has been uploaded so far.

Action: All Concerned CCAs/ CAs

6. Agenda Item Number-5: Discrepancies in the bookie of Expenditure under 

Pension grant:

It was observed that there were many discrepancies in the booking of expenditure under

 pension grant No.35 in the year-2016-17 (up to 2nd quarter) by many Ministries/Departments

 i.e. expenditure in excess of budget, expenditure without budget, misclassification between

 charged and voted expenditure, expenditure booked in minus etc. 

An OM dated 11.11.2016 with details of discrepancies had already been issued to

 CCAs/CAs. All concerned CCAs/CAs were advised to regularly review the booking of 

expenditure under various heads of pension grant in their Ministries/Departments with the

 help of reports available under e-lekha/PFMS and ensure to avoid any discrepancies in 

booking under pension grant.

Action: All Concerned CCAs/ CM

7. During the meeting, CCA, Home Affairs and CA, Agriculture requested CC (P)

 to organize workshop for their pension processing PAOs in CPAO on WRPS and various

 pens’ ion related issues. It was agreed that workshop for PAOs of Ministry of Agriculture 

would be organized on 18th November, 2016 and for MHA on 1st December, 2016 at CPAO.

 Other Ministries were also requested to work out schedule of workshop for their PAOs in

 consultation with CPAO.

Action: All Concerned CCAs/CA, CPAO, MHA, Agriculture

The meeting ended with vote of thanks to the chair.

Signed copy

Next Meeting on Allowances to be held on 28.11.2016

Next Meeting on Allowances to be held on 28.11.2016: Nomination of Representatives of Recognized Federations of Indian Railways

GOVERNMENT OF INDIA

MINISTRY OF RAILWAYS

RAILWAY BOARD

No. PC-VII/2016/COS/3

New Delhi Dated: 25.11.2016

OFFICE MEMORANDUM

Sub: Nomination of Representatives of recognized federations of Indian Railways to attend the meeting on Allowances to be held on 28.11.2016.

The undersigned is directed to refer Ministry of Finance’s OM dated 21.11.2016 advising this Ministry to nominate names of representatives of recognized Federations/Staff Associations of Indian Railways to present their views on Allowances pertaining to Ministry of Railways in the meeting scheduled to be held on 28.11.2016 at North Block.

2. It is advised that the following representatives would be representing the recognized Staff Federations of Indian Railways in the aforesaid meeting.

(i) Shri Shiv Gopal Mishra, General Secretary, AIRF

(ii) Dr. M. Raghavaiah, General Secretary, NFIR.

3. With regard to the request forwarded by All India Train Controllers Association and All India Guard Council to call them for the aforesaid meeting, it is stated that this Ministry is of the view that the request may not be acceded to as both associations are un-recognized and acceding such request will result in similar demands from large number of un-recognized associations in Ministry of Railways. It is also stated that All India Railwaymen’s Federation (AIRF) and National Federation of Indian Railwaymen (NFIR) are only two recognized federations of Indian Railways.

National Union Group - C & MTS &Postman Bi - Annial Conferance - Khammam Division Photos

National Union Group - C & MTS   &Postman Bi - Annial Conferance - Khammam Division (Telangana Circle ) Photos.

Accusations abound in Supreme Court during demonetisation hearing

The morning’s hearing began with senior advocate Kapil Sibal claiming that “people were starving on the roads.” As accusations overawed decorum in the demonetisation hearing, a Supreme Court Bench led by Chief Justice T.S. Thakur urged lawyers to maintain the dignity of the court while assuring all that the judiciary will “certainly” hear both the ground realities and weigh the constitutionality of the November 8 RBI notification. In a hearing on the demonetisation issue on Friday, the apex court said it will on December 2 comprehensively hear everyone involved on the various questions, including the hardships caused by demonetisation, the transferring of petitions filed in the various High Courts to Delhi, the constitutional validity of the RBI notification, and finally whether the issue should be referred to a Constitution Bench. In this, the Bench accepted the suggestion of the government that it was better to hear the demonetisation issue in its totality on December 2 rather than in a piecemeal fashion. Attorney General Mukul Rohatgi submitted that the government’s petition to transfer all demonetisation-related cases from other High Courts to the National Capital is already scheduled for hearing on December 2. “In that case the four separate petitons — listed today for hearing — should also be heard on the same day. This would ensure that the court can take an informed decision after considering all the aspects of the issue,” Mr. Rohatgi said. Agreeing to this, Justice Thakur said the Bench would keep its calendar clear on December 2 at 2 p.m. for a detailed hearing. The morning’s hearing began with senior advocate Kapil Sibal, appearing for a petitioner, claiming that “people were starving on the roads.” “Nobody is starving on the roads,” Mr. Rohatgi said, dismissing the claim. “The markets are closed,” Mr. Sibal retorted. At this point, advocate Manohar Lal Sharma, who claimed that the new Rs. 2000 bank notes bleed and can be easily faked, wrested the floor from Mr. Sibal, claiming “all the banks are closed.” “Maximum cash has gone into BJP hands,” Mr. Sharma declared as shouts of protest rose from several of the lawyers in the courtroom. Then lawyers vied with each other, raising their hands for the court’s attention as pandemonium threatened. Justice Thakur, who along with Justice D.Y. Chandrachud, maintained silence all through. But the Chief Justice reined in the confusion by issuing a stern warning that the court would adjourn the hearing by another six weeks unless order was restored immediately. “Everyone is shouting with their hands over the other’s shoulder. This is a courtroom and there is some decorum to be observed here. We will adjourn the case for hearing after the vacation,” Chief Justice Thakur addressed the crowded courtroom. “There are some really serious issues here, My Lords,” Mr. Sibal interceded. “If there is a difficulty, you tell us what the problems are,” Chief Justice Thakur addressed the senior lawyer. “There is a lot of inconvenience. They don’t have the capacity to print the new currency. What are they going to do?” Mr. Sibal stressed. “If you want us to look into it... We will certainly do... But we will hear all. We cannot hear this issue piecemeal,” Chief Justice Thakur said, refusing Mr. Sibal’s plea to advance the hearing to Tuesday next. 

source : http://www.thehindu.com/

CBI carries out raids at post offices in Hyderabad after irregularities

CBI officials obtained inputs about irregularities in post offices in terms of amount being accepted in old 500, 1000 rupee notes after demonetisation.

Simultaneous raids were conducted on as many as eight post offices in Hyderabad city.

CASH WORTH RS 40 LAKH SEIZED FROM HIMAYATNAGAR POST OFFICE

Reports suggest that during the raids, cash worth Rs 40 lakh was seized from Himayatnagar post office. The raids are going on at the General Post Office in Abids, Narayanguda, Chikkadpally and Himayatnagar areas. CBI officials interrogated the post office staff, inspecting their records and cash reserves relating to transactions since November 9.

CBI GOT COMPLAINTS ABOUT POST OFFICE STAFF

Sources say that the CBI has received complaints that some post office staff are allegedly exchanging the demonetised high-currency notes illegally. The sleuths are also verifying certain savings accounts, where a huge amount of money has been deposited post the demonetisation announcement.

FNPO Letter to Secretary DoP on Retirement & Death Gratuity

Extension of benefits of Retirement Gratuity and Death Gratuity to the Postal employees who joined the Govt. Service on or after 01.01.2004.- Our Federation Sent a letter to the Secretary DOP.

Click the link above to view the letter 

FEDERATIONOFNATIONALPOSTALORGANISATIONS

T-24,Atul Grove Road, New Delhi - 110 001. Phone : 011-23321378

E-mail: theagarajannachi@hotmail.com.

Ref:9/NAPE/172/2016 24/11/2016

To

Shri. B.V. SUDHAKAR

Secretary,

Department of Posts,

Dak Bhawan ,

New Delhi-110 001

.

Sub: Extension of benefits of Retirement Gratuity and Death Gratuity to the Central Govt. Employees covered by new Defined Contribution Pension System (National Pension System)-regarding.

Ref: Ministry of Personnel, Public Grievances and Pensions, Dept of Pension and Pensioners Welfare memo no. 7/5/2012-P &PW (F)/B dated 26.08.2016,

************

Your kind attention is invited to the letter cited above, wherein the Ministry of Personnel Public Grievances and Pensions, Dept of Pension and Pensioners have been issued to grant gratuity in respect of Govt employees covered by the National Pension System. The orders will be applicable to those Central Civil Govt. Employees who joined the Govt. Service on or after 01.01.2004.

Though the concerned Ministry has issued orders in August 2016 itself, DOP is yet to issue orders to our employees

Hence it is requested that necessary action may kindly be taken to issue orders to the Heads of the Circles at the earliest so as to enable the officials who have retired from service covered by National Pension System to receive the benefits. 

.

Yours Sincerely,

D.Thegarajan.

Secretary General.

Copy to:

1)Shri A.K.Dash, Member (P),

2)MS.Manju Pandey DDG(P).

Regarding payment of Severance Amount to the beneficiaries of SDBS and NPS Subscription deductions under SDBS.

Regarding payment of Severance Amount to the beneficiaries of SDBS and NPS Subscription deductions under SDBS.

Cabinet moves in to tax post demonetisation deposits

Prime Minister Narendra Modi in the Rajya Sabha on Thursday.   | Photo Credit: PTI

The Union Cabinet on Thursday night is believed to have discussed amending laws to levy close to 60 per cent income tax on unaccounted deposits in banks above a threshold post demonetisation of high-denomination currency notes.

The move comes amid banks reporting over Rs. 21,000 crore being deposited in zero-balance Jan Dhan accounts in two weeks after the Rs. 500 and Rs. 1,000 notes were banned, which authorities apprehend may be the laundered black money.

There was no official briefing on what transpired in the meeting that was called at short notice as Parliament is in session. Traditionally, there could no disclosures outside on any policy decision taken during the sitting of Parliament.

Sources said the government was keen to tax all unaccounted money deposited in bank accounts after it allowed the banned currency to be deposited in bank accounts during a 50-day window from November 10 to December 30.

There have been various statements on behalf of the government ever since the demonetisation scheme was announced on November 8, which has led to fears of the taxman coming down heavily on suspicious deposits that could be made to launder black money.

Officials have even talked of a 30 per cent tax plus a 200 per cent penalty on top of a possible prosecution in cases where black money holders took advantage of the 50-day window for depositing the banned currency.

Sources said the government plans to bring an amendment to the Income Tax Act during the current winter session of Parliament to levy a tax that will be higher than 45 per cent tax and penalty charged on black money disclosed in the one-time Income Disclosure Scheme that ended on September 30.

As for those black money holders who did not utilise the window, they would be charged a higher rate which could be close to 60 per cent that the foreign black money holder had paid in 2015.

Sources said the government is keen to root out benami deposits, particularly in Jan Dhan accounts.

There was also talk of the government imposing a limit on domestic gold holding, but it is not clear if the proposal was discussed at the Cabinet meeting chaired by Prime Minister Narendra Modi on Thursday night.

The Cabinet meeting, summoned at a very short notice, comes amid reports of high tax penalty terrifying people from putting their cash savings in the formal banking system.

The sources said the government wants all of the Rs. 500 and Rs. 1,000 banknotes to be deposited and not burnt or destroyed for the fear of penal action.

The Income Tax Department had previously warned that cash deposits above Rs. 2.5 lakh threshold post demonetisation decision could attract tax plus a 200 per cent penalty in case of income mismatch.

It was stated that the department was tracking all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs. 2.5 lakh in every account.

This had instilled fear in people with reports of the banned currency even being destroyed.

The sources added that the government may come out with a deposit scheme or an instrument like bond where the cash savings in the banned notes could be deposited.

A 50-day window was given to holders of the old currency to deposit in their bank accounts. But the penal tax provisions were deterring many.

Source : http://www.thehindu.com/