PAY FIXATION LATEST NEWS

FIGHT FOR RIGHT : PAY FIXATION OF REEMPLOYED JCOS/OR

           

Pay fixation of reemployed Ex-servicemen is a long pending issue and now I want to narrate the entire case history and present status of the case. After putting several years of bona fide military service in Indian Armed forces, soldier, sailors and airmen are left in uncertain civil life at their middle age. A very few of them only get reemployed in Govt department . Burt their pay is fixed at the entry pay which is applicable to a just college pass out new teenager  recruit.   Whereas the retired JCOs/OR at this time heavily shucked with burden maintain his family in terms of education & marriage of children, built a shelter and take care of old age parents.


To see the video please click here : PAY FIXATION OF REEMPLOYED EX SERVICEMAN

To watch video click on the picture above 

            Here I would like to narrate the entire issue since back in 1958. You may watch video on link given above to know this entire facts.

            In 1958, Ministry of Finance, Department of Expenditure issued guidelines regarding modalities of pay fixation of all ranks. At that time pay fixation at higher stage was applicable to the reemployed persons who were in undue hardship.  The parameter of undue hardship was determined with some simple arrays. It was in simple form like that,  If your pay in reemployed civil post plus pension sanctioned less ignorable  part  total amount  is less than pre-retirement pay the condition will be treated as undue hardship.  In such cases, advance increment was granted equal to number of years served in Armed forces.

            In 1983 the system turned more simplified.  Entire pension of JCOs/OR treated as ignored for the purpose of pay fixation.  As a result if your present pay of civil post was less than your pre-retirement pay then you were eligible to be treated under undue hardship.  Advance increment was still applicable.

            In 1986 the controlling authority of pay fixation related orders shifted from Ministry of finance to DOPT. After implementation of 4^th CPC on 31 July 1986 DOP&T issued guidelines where modality of pay fixation has divided in to two different categories.  The first one is for Retired Commissioned officers or Gp A officers of Civil sides. And another set of orders for reemployed JCOs/OR or equivalent civil post.

            A re-employed commissioned officers who retired before 55 years of age and appointed in any civil post, he will be allowed to draw the pay in civil post at the same stage as the pay drawn before retirement. Deduction will be made after allowing all pay and allowances on the pay so fixed. The deduction amount is equivalent to pension less  non ignorable part of pension (Rs 15,000 at present).

Click here to Know the details

For illustration Col XYZ retired with basic pay  Rs 1,60,000/-  + MSP 15,500

Pension = Rs 87,750/- + DR  =  Total Rs 1,06,178/-

Reemployed in Gp A  Central Civil Services  with initial pay Rs 56,100/- + DA (21%) + TA(7200+21%DA) + HRA (24%)  = 90,057/-

(Pay + pension should not exceed  2,25,000 - 87,500 = Rs 1,37,250 In this case the pay to be fixed &  restricted to Rs 1,37,250/-) (as per DOPT OM dt 01.05.2017 effected from 01.01.2016)

His pay will be fixed at Rs 1,37,250/- + DA (21%)+ TA(7200+21%DA) + HRA (24%) 

= Gross pay Rs 2,07,725/- 

Deduct  Pension  (Less ignorable part)  - Rs 80,000 – 15,000/- = 65,000/-  (MSP element of
                                                                                                                pension not to be counted )

 Net salary drawn – Rs 2,07,725 – 65,000/- = 1,42,725/-

His total income Pay + pension =  Rs. 1,42,725/- + Rs. 87,750/- = Rs 2,30,475/-  

                                                             (DR on pension not applicable)

In case of non applicability of pay fixation benefit his total income would have  (Pay + Pension with DR)

Rs 90057/- +  106178/- = 1,96,235/-

So, the senior officer is benefited by Rs 2,30,475 – Rs 1,96,235/- =  Rs 34,240/

Now, the JCOs/OR who retires before 55 years of age :-

Pay to be fixed at minimum of pay applicable to new recruit on the reemployed post.

Hence, they are totally ignored and no pay fixation benefit is applicable to this category.

Question of illustration does not arise here.

From the above facts following three things are extracted:-

1)    Policy makers always think about their own category. Welfare of other categories done not makes any sense to them.

2)    Joining defence forces in other than commissioned rank is a matter of pride, because we have the ability to live without any special provisions of government.

3)    The things which are getting wrong with someone else do not bothered others.

This 1986 DOPT orders was applicable to employees of Central Civil Services only.  Bank and other PSU and some stat government employees were allowed to get the pay protection, the methodology which was different this and ultimately these reemployed JCOs/OR were ultimately benefitted enough. 

Meanwhile RTI Act 2005 enforced.

In the year 2010 Govt of India  issued another set of instructions regarding applicability of pay fixation which caused huge ambiguity in interpretations and some department started giving pay fixation benefit to reemployed JCOs/OR.  Ignorable part of pension increased from Rs 1,500 to Rs 4,000/- for Commissioned Officers. Those who did not get the benefit, raised their voice through RTI applications and PG Portal. Ultimately all central Govt department seized to extend the pay fixation benefit to reemployed JCOs/OR.  Approx 400 Court case raised in different part of the country.

In the course of time, re-employed ex-servicemen united at their respective department level and regional level. Various reemployed ex-servicemen associations approached the Directorate of Ex-Servicemen Welfare (DESW) under Ministry of Defence and they have ultimately convinced and accepted the injustice and discrimination in the 1986 pay fixation orders and agreed to make necessary rectification.

They promised to issue suitable instructions to fix the pay of JCOs/OR at par with the Commissioned officers but the CCS (RP) Rules , Fixation of pay of reemployed pensioners 2016 failed to incorporate any such instructions in this regard.

Meanwhile, in the year 2017, the All India Ex-Servicemen Association formed which was recognized by Ministry of Defence and other stake holders. The Association met Govt authorities in formal meeting to discuss the anomalies in 2016 pay fixation orders.  After repeated requests and reminders and a number of meeting held with Ministry of Defence and DOP&T, finally  DOP&T has drafted the revised order of pay fixation  which is at par with the pay fixation method adopted earlier for Commissioned Officers which were circulated to the stakeholders for necessary review and recommendation at their end.

During the recent meeting held with the authority, they assured us that the final orders will be issued very soon once the draft reviewed by the stake holders and received at their end.

Salient features of the Proposed Pay fixation Orders of DOP&T are as given below :-

CCS (RP) Fixation of pay of reemployed pensioners
rules 2019.

1.    Modalities of pay fixation for JCOs/OR will be at par with other categories.2. Ignorable part of pension will be 15000 or 70% of pension whichever is less.

3.    DR on pension will be seized for entire reemployment period.

4.   Will be effective from 01.01.2016 and retrospective effect is applicable to existing reemployed pensioners.

5.    MSP, class pay & x pay will not be counted as part of

       pre-retirement  pay.

6.  Combatant clerks will be treated at par with other categories

7.   Age limit for ignoring a part of pension increased from 55 to 57.

 

Here is an illustration of pay fixation of a reemployed Hav of Indian Army (Level 5 of Pay matrix)  who retired from armed forces in 30.04.2020

ILLUSTRATION (PROPOSED DOPT PAY FIXATION RULES-2019)  :

Last pay in Armed force : Rs 46,000/- + 5200(MSP) +6200 (X Pay)
                                                      + 360 (Class-I pay) = Rs 57760/-

Initial pay of civil post    : Rs 29,200/-

Pension sanctioned         : Rs 28,880/-

Pay to be fixed : Rs 46,000/- + DA + HRA + other
                      allowances = Rs 71,056/-

Deduction         : Rs 23,000 – 70% of 23,000

                            = Rs 8790/-   (MSP, X Pay, Class pay etc are not to
                                           be counted)

Net pay in civil post = 71,056 – 8790 = 62,266/-

Net pension in civil post = 28,880/- (including commuted portion)

                                                          No DR applicable.

Total pay + Pension  = 62266 + 28880 = Rs 91146/-

ILLUSTRATION (AT PRESENT AS PER 1986 PAY FIXATION RULES)  :

Last pay in Armed force : Rs 57,760/-  (PAY IN PAY MATRICS ONLY)

Initial pay of civil post    : Rs 29200/- (Auditor/Accountant grade)

Pension sanctioned         : Rs 28880/-

Pay to be fixed : 29200/- TA(3600+21%DA)+ DA(21%) + HRA(24%)

       = Rs 46696/-

Deduction                         : Nil

Net Pension                        =  28880/- + DA 21%

                                              =  Rs. 34945/- (including commuted amount)

Total pay + Pension           =  46696 + 34945 = Rs 81641/-

So, net difference        = 91146 – 81641 =   Rs 9505/-

The final Orders is likely to be issued by DOPT very soon.  Case has been taken with DOPT by AIREXSA for inclusion of all elements of pre-retirement pay for purpose of fixation of pay in civil post.  

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Meeting at Howrah on 25 December 2017

Address: 25,32,33 Ibrahim Mansion Parel,Mumbai-400012.

Registration No. A.L.C/DESK No-17/11117 Dated 04 th March 2017.

 Email Id: airexsa2017@gmail.com(M):8879898861/9833157398/9036168172          

President:                                          Working President                        General Secretary

Shri. Yesbir Singh                             Shri.     Ramakrishna Reddy           Shri. Jagadish Mahata

   9833157398                             9036168172                               8879898861

----------------------------------------------------------------------------------------------------------------------------------------------------------------

INVITE TO ALL RE-EMPLOYED EX-SERVICEMEN TO ATTEND THE MEETING.

           

A meeting is proposed by All India Re-Employed Ex-servicemen Association, which is scheduled on 25^thof December2017 at “INDIAN MEDICAL ASSOCIATION, HOWRAH BRANCH, BIPLABI HAREN GHOSH SARANI, HOWRAH-711101 (Just beside the Main Gate of Bijoykrishna Girls College) AT 10.00 Am. (Bus towards Howrah Maidan via Bankim Setu get down  at Girls College stoppage on Bankim Setu itself)

CO-ORDINATOR	FUND MANAGER	GUIDANCE
Shri Sudip Hore(8013341186) Shri Parag Chatterjee (9830882695) Shri Bikash De (9088883623) Shri Gorachand Das (9748349172) Shri Subrata Chakraborty(8902296207) Md. Abul Hassan(9874791372)	Shri  Ranjit Dutta Shri  ID Choudhary Shri TusharThakur Shri Ashish Seth	Shri Jagadish Mahata Shri Yesbir Singh Shri Kedar Satpathi

The Schedule of the Meeting will be as follows:-

1^st Session Timing       -           From 1000 Hrs to 1300 Hrs

Lunch break                -           From 1300 Hrs to 1400 Hrs

2^nd Session                   -           1400 Hrs to 1530 Hrs

Dear members,

I would like to inform all my colleagues who have been re-employed as a Govt. employees like Central Govt./State Govt./CPSU/SPSU/, the agenda of the meeting will be 'pay fixation' and other issues, you can also raise your problems and we can work for it’s solutions. Please confirm your plan of attending the meeting before 17th Decmber2017 to the co-ordinator. So that they can do the necessary arrangements. You can confirm your plan by texting them on WhatsApp of our association(AIREXA)any group or personally contact with them.

Regards,

       Jagadish Mahata

      General Secretary.

Correspondence Address

A/204, K. Bhaskar Patil Apartment, Kolshet Road, Taricha Pada, Kolshet Gaon, Sandoz Baug, Thane – 400607

MEETING OF AIREXA AND DOP&T HELD ON 10 OCT 2017

Congratulations to All Ex Servicemen. Minutes of Meeting OF AIREXSA with Joint Secretary (DOPT) held on 10th October-2017.

The meeting of the AIREXSA was held at 4.00 pm under chairmanship of Joint Secretary(E)  at Room No 111,Noth Block,New Delhi. The list of participants is mentioned below.

From DOPT side:-       Shri Gyanendra Dev Tripathi ……..Joint Secretary ( E)

            Shri Ashok Kumar Jain……Deputy Secretary(Pay)

            Shri Puspender Kumar…..Under Secretary (Pay)

From AIREXSA side:- Shri Yesbir Singh…..President (Railway)

            Shri Jagadish Mahata…General Secretary (EPFO)

            Shri Sanjay Tiwari…Joint Secretary (FCI)

            Shri VCS Ravi Prasad…Member (EPFO)

In his introductory comments, he told us to say our contention  regarding re-fixation of pay of Ex-Serviceman (PBOR) at the same time , I had nominated to Shri Sanjay Tiwari to say our fact.

The outcome of our discussion was very positive as he has realised our core issue but at the same time he has expressed his inability to amend any rule of their own until the same is passed by the Parliament/Ministries. But on the other side they said that they are preparing a draft to put to concerned Ministry, and once the draft is ready they will again call a meeting with our representative for consultation and prepare the final draft. The same will be sent to concerned Ministry for approval. Once it is approved the DOPT will make the order in this regard.

The Deputy Secretary and undersecretary has told that they are receiving many grievances every day regarding this subject so they are unable to concentrate on this matter as they are busy in replying those grievance/RTI. And requested our members not to put grievances till the final draft is ready. So the same can be done at an early time.

Secretary of our AIREXS requested all not to put grievances/RTI  till the draft is ready. 

PAY FIXATION OF REEMPLOYED COMBATANT CLERKS IN CENTRAL GOVT SERVICES : IGNORABLE PART OF PENSION IS STILL RS 15/-

DOPT File notes on 01.05.2017 OM which is positive

Noting of DOPT regarding OM dated 01.05.2017

DOPT IS POSITIVE IN OUR PAY FIXATION ISSUE AND THEY WILL ISSUE ORDER SOON

DOPT approached to following dept for issuance of OM regarding applicability of CCS RP Rules 2016 on implimentation of VII CPC benefits to Reemployed pensioners :

  1.   DoE, Min of Finance
  2.   DESW, Min of Def
  3.   DOP&PW, Ministry of personnel

DOPT sent the draft OM regarding the applicability of CCS RP Rules to the reemployed pensioners to above depts and they all have sent their views on the draft OM.  DESW has sent the positive view regarding our demand for pay fixation at par with Commissioned Officers vide their OM No 28(11)2017/D (Res-I) dtd 15.02.2017.

On receipt of the all inputs from the above depts DOPT has placed the revised OM in their file note. No 3/3/2016-Estt (Pay-II) Note 35, 36 & 37 dated 10.04.2017.
Relevant portion of their notes are reproduced below :-

D/o Exservicemen Welfare have also stated that that MSP needs to be reckoned as part of pre-retirement pay while carrying out pay fixation in re-employed posts.

Further, they have stated that JCO/OR (PBOR) should be given option to choose between pay fixation  at minimum of the pay scale of the reemployed post and pay fixation by protecting last pay drawn (as done in the case of Commissioned Officers/Gp A officers), whichever is more beneficial to them.  At present the draft OM is only intended to extend the benefits of VII CPC to re-employed pensioners and has already received the concurrence of Do Expenditure.  Notwithstanding the above, as the instant suggestion of D/o ESW involves change in policy, the same is proposed to be taken up separately while consolidating the existing orders on the subject.

5.    The draft OM has sine been re-visited in view of the aforesaid comments received from the three Departments and following changes have further been made to the draft OM -

The comments of D/o Pensions & PW and D/o ESW in respect of revision of pension limits in respect of ex-combatants clerks / storemen being inconclusive, it is proposed that the ignorable part of pension may be substantially enhanced to Rs 5000/- to make it reasonable and proportionate with ignorable pension limit of Rs 15000/- in respect of Group 'A' Officers.   It may be noted that entry pay of Group A officer in VII CPC Scenario is Rs 56100/- for whom the ignorable part of pension has been calculated as Rs 15000/-.  Applying the same formula to Clerks with pay scale / level 2 in the pay matrix with minimum pay of Rs 19900/- on a proportionate basis, the ignorable amount of pension comes to Rs 5321/- approximately, which may be rounded off to Rs 5000/-.  Keeping in view he observation of D/o Expenditure on this para with regard to the need of retaining the provision itself, it is to be pointed out the ex-combatant clerks/storemen continue to be re-employed in Civil Posts and as such, the said provision cannot be done away with.  So far as the concurrence of D/o Expenditure on the amount or Rs 5000/- as ignorable part of pension is concerned,the same shall be obtained at the time of consolidation of various instructions on this subject.

JS(E)

   This OM is necessary to be issued so that the benefits of 7th CPC are extended to re-employed pensioners except persons re-employed on contract except those where contract provide otherwise.

    There have been many grievance regarding different pay fixation formula adopted in respect of Group 'A' and below group 'A' re-employed pensioners which has been reflected in the views of DESW.  We have already suggested a formulations to DESW which is largely agreeable to them but if we desirable to issue the consolidated OM it will require fresh consultation with DoE & DP&PW which may take some time.  Therefore we are delinking the policy change issue from operational issue.  We will issue suitable policy OM with necessary consultation.



(Scanned copy of the Note sheet will be uploaded in due course)

Reemployed Exsm Meeting on 25.06.2017 in Kolkata

The meeting of reemployed ex-servicemen will be held on 25.06.2017 in Kolkata.

Venue and time will be intimated later.

Agenda - Pay fixation of reemployed ex-servicemen.

All local reemployed ex-servicemen are requested to attend the same.

For details please Contact - 7003693603  Parag Chatterjeee, Coordinator/Convenor.

Representation regarding Exservicemen entertained by DOP&T

Copy of DOP&T OM as below :-

Ministry of Defence recommended for pay fixation of Exsm JCOS/OR

Dear veteran friends,

      Our movement, fight for rights likely to win the battle.  Ministry of defence has forwarded their recommendation to DOPT and positively recommended.  Mr Puspendra Singh, Under Secretary, DOPT has sent the document to me.

CLARIFICATION OF DOPT ORDERS REGARDING PAY FIXATION

Clarification about Para 4(b)(i) of DoPT OM dated 5.04.2010 for which Shri Pushpender Kumar the under secretary (Pay) DoPT stated pay is allowed only at the entry pay as pension is not deducted in the case of PBOR and the orders make a clear distinction between fixation of pay Commissioned Officers and PBOR .

Para 4 (b) (i) : the Para states in case where the pension is fully ignored initial pay should be fixed as per entry pay of the re-employed post as in the case of direct recruits appointed on or after 1.1.2006 as notified vide section Part A of first Schedule to CCS (RP) rules, 2008.It is pertinent to note that :

(a)         It may be noted that due to the introduction running pay bands and Grade Pay in the 6^th CPC, the term “Minimum Pay has been replaced with Entry Pay in the revised pay structure as given Para (b) (i) of the DoPT O.M dated 05/04/2010.

(b)         Here the line “Pay shall be fixed as per the entry of the re-employed post” implies the Pay scale /structure of the re-employed post to be considered while initial pay fixation and not the minimum pay at which pay is to be fixed.

(c)          That the Ministry of Finance issued Notification vide GSR 622 (E) dated 29.08.2008 in exercise of powers conferred by the provisions to article 309 and clause (5) of article 148 of constitution of India. Therefore the eligibility of the applicant for the pay fixation is prescribed by the DOPT OM dated 11.11.2008 and it is therefore from 01-01-2006 the initial pay of re-employed government ,who received pension or any other retirement benefits but which were ignored while fixing on re-employed and who elects or is deemed to have elected to be governed by the revised pay scale from 1-1-2006  and their pay shall be fixed according to the provision of by Rule 7 of CCS (RP) Rules, 2008  for determine the initial pay on re-employment vide Para 2(1) and Para 1(II) of DOPT OM dated 11-11-2008.It also further clarified  the application of Rule 7 is continue to apply in cases of pay fixation re-employed persons vide DOPT circular No. 997012/2014-Estt(Pay) dated 26-6-2014.

(d)         In this regard, it has been clarified by the ministry of Defence (Finance) as communicated by CGDA vide letter No. AT/II/2432-VI dated 15/02/1993,No.AT/Tech/263-XVIII dated 12.05.2015  that in all cases where the entire amount of pension is ignored , the initial pay on re-employment has to be fixed at the minimum of the scale of the re-employed post and therefore there is no necessity of indicating the pay drawn by individual from the date of enrollment to the date of discharge , and only particulars of Last Pay drawn will serve the purpose, in the other words , where the entire amount of pension ignored , furnishing the Last pay drawn particulars of Military Pensioner will suffice for the purpose of fixation on re-of pay employment.

(e)         The pay of the fresh recruit recruited on or after 1.1.2006 is fixed at minimum of the pay scale and has  no relevance to the ex-servicemen and that is to be done in accordance with Rule 8 and the same is extracted in Para-08 of the Gazette Notification dated 29.08.2008 that :

                                                                                                                       “8……..Section-II of Part-A of the first schedule of these rules indicates the entry level pay in the pay band at which the pay of direct recruits to a particular post carrying specific grade pay will be fixed on or after 01.01.2006”

(f)             Office of the Pr.C.D.A. (P), Allahabad vide their letter No .At/Tech/263-XVI dated 07.03.2013(Circular No.166 ) clarified about the distinction between pay fixation of pay of Commissioned Officer and PBOR that in case of re-employed Commissioned Officers the pay in the post of re-employment is not required to be fixed at the minimum of the scale as a certain portion of pension is taken into account and entirely ignored whereas  in all cases of the   ex-servicemen (PBOR) on re-employment   their pay fixed at higher stage and the pay should be treated as fixed at a minimum only for the purpose of ignoring the entire pension and allowing dearness relief on pension .(Copy enclosed).

(g)         More so Para 3 of the OM dated 5.4.2010 said that apart from the Para’s 4(a),(b)(i),(b)(ii),(c) it is also clarified in which (iv) and (v) provided which clearly stipulated about the fixation of pay of personnel/officers re-employed  prior to  1.1.2006 and who were in employment as on 11.1.2006 and who retired prior to 1.1.2006 and wh have been re-employed after 1.1.2006. Further Para 3(v) effected for both officers and personnel (PBOR) as the word clearly mentioned personnel/Officers. The Para states that their pay on re-employment will be fixed by notionally arriving at their revised basic pay at the time of retirement as if they had retired under the revised pay structure. This will be done with reference to the fitment table of the Defence Service Rank/civilian service post (as the case may be ) from which they had retired and the stage of basic pay at the time of their retirement. The basic pay before retirement so arrived at. However, they shall be granted the grade pay of the re-employed post. The maximum basic pay in the pay band of Rs.67, 000/- i.e. the maximum of the pay band PB-4.In all these cases, the non-ignorable part of the pension shall be reduced from the pay so fixed.

Refer the judgments of Hon’ble CAT  Bangalore bench OA No 1276/2013 dated 14.07.2010 and Hon’ble CAT Chennai Bench OA No 310/01207/2015 dated 22.07.2016.

.

Para 4(d): It so clear that where a pensioner who is retired before attaining the age of 55 years is re-employed, in fixing is pay on re-employment, his pension is not fully ignored but is ignored only to the extent provided in Para (d) of clause 4 of DoPT OM dated 5.4.2010 and his pay is to be fixed as per Clause 4(b)(ii) where he is re-employed. In such cases Rule is not fix the Pay at the minimum of Pay scale applicable to the post. But has to be fixed at the same stage at the last pay drawn before retirement.

Refer the Judgment of Hon’ble High Court of Rajasthan OA No 2002(4)WLN 603 dated 07 December 2001.

It therefore for the purpose all the elements constituting Pre-Retirement Pay as mentioned in Para 3.1 of Government of India , Ministry of defence letter dated 12.11.2010 and the DoPT OM dated 8.11.2010 and as obtained from their last Pay Certificate and PPO  have been consolidated to form the Entry Pay. The amount so arrived at has been fixed as the Basic Pay as on the date of joining to the department.

                                                                                          

We must win the battle

Dear Veteran Friends & Seniors,

   

We have reached at the door of our success point.  Ministry of Defence has recommended in our favour and further submitted to the Nodal agency i.e DOP&T.  We should wait for a little bit to get the orders redirected through the DOP&T.  After finalisation of 7th CPC allowances and other disputed issued very soon, in mid of March we are likely to getting our long waiting justice.  We have consulted the renowned advocate of Calcutta High Court and after through study of our case he advised us that we should wait for DOP&T's expected Orders that to be released soon based on the recommendation of Ministry of Defence.  So, we have been advised that we need not file any court case wrt now.

Hope for the best.

Jai Hind.

DESW RECOMMENDED POSITIVE FOR PAY FIXATION OF REEMPLOYED EXSM

Registration Number	:	DDESW/E/2016/01613
Name Of Complainant	:	Bikash De
Date of Receipt	:	31 Oct 2016
Received by	:	Department of Ex Servicemen Welfare
Forwarded to	:	Department of Ex Servicemen Welfare
Contact Address	:	99-A
		South Block
		DHQ PO New Delhi
Contact Number	:	23011804
Grievance Description	:	Raksha Mantris Committee of Experts 2015 para 2.3.3 states about non inclusion of military service pay and other elements of emoluments during fixation of pay on reemployment of military pensioners on the civil side. The committee discussed about problem of Pay fixation related to Commissioned Officers only. The Ex PBOR reemployed in Central Govt Dept are also deprived out of their dues due to non consideration of any of the elements of pre-retirement pay. Details attached in PDF file (click here). Please consider the facts and do the needful.
Current Status	:	CASE CLOSED
Your Feedback	:	Excellent
Date of Action	:	24 Nov 2016
Details	:	Please see attachment.
Attachment	:	open

INCOME TAX EXEMPTION OF DISABILITY PENSION

MAJ NAVDEEP'S LETTER TO CHAIRMAN SBI , ON TDS ON DEFENCE DISABILITY PENSION

Law Office of NAVDEEP   SINGH                                 

Advocate, Punjab & Haryana High Court

Office-cum-Residence : # 1063, Sec 2, Panchkula – 134112, Haryana

Phones : 099888-LEGAL, 093161-32817    Email : navdeepsingh.india@...

Your reference :                                                                        

 Our  reference :

 To:

Chairman-cum-Managing Director (CMD)

State Bank of India, Mumbai

                                                                                      01 September 2016

ILLEGAL DEDUCTION OF INCOME TAX ON DISABILITY PENSION BY THE STATE BANKOF INDIA IN CONTRAVENTION OF DIRECTIONS OF THE GOVT

1.    Shocking instances have come to light wherein your bank has indulged in deduction of Income Tax at source in case of Disability Pensioners. On further inquiry, it has been informed that the action is based upon some ‘advice’ rendered by a Chartered Accountant that income tax exemption is only available to those pensioners who have been invalided out before completion of their service for normal pension, that is, those released earlier than 20 years in case of Commissioned Officers and 15 years in case of ranks other than Commissioned Officers, and that the said exemption is not available on the service element of those who have been released/ retired/discharged with a pension after serving more than 20/15 years of service as above.

2.    Firstly, your attention is invited to Instruction No 2/2001 issued by the Central Board of Direct Taxes in this regard which amply explains the issue (Appx A). Your attention is also invited to Paragraph 88.3 of the Pension Payment Instructions issued to all your banks by the Government (Appx B) which leaves no scope of doubt regarding exemption of income tax from the entire disability pension, including service element. Moreover, the interpretation of your bank in this regard is absolutely incorrect, absurd and militates against the rules and norms promulgated by the Government as above. It may be recalled that Income Tax exemption on complete disability pension is available to defence personnel since the 1920s.

3.    On discussion, it emerges that the confusion has been created due to the terminology of ‘Service Element’ which is hereby clarified for your benefit in the following lines. Disabled personnel who are granted disability benefits at the time of release from service are known as Disability Pensioners.  The said Disability Pension consists of two elements- service element and disability element. Both elements taken together are known as Disability Pension. There is no minimum qualifying service required for the grant of Service Element with effect from 01 January 1973. The calculation of service element however is different in cases of those personnel released from service before completion of pensionable service limits vis-a-vis those who are released on completing pensionable service limits. In case of the latter, the service element is granted at a rate equal to Service Pension. The fact that the pension granted for service in both cases is known as Service Element becomes clear from a bare perusal of Regulation 183 of the Pension Regulations, 1961, which contains two clauses, that is, 183(1)(a) for those who are released with sufficient service to earn a pension, and 183(1)(b) for those who are released before completing sufficient service to qualify for normal service pension. The said Regulation is enclosed as Appx C. Please note from the Regulation that in both cases the service part of the pension is known as Service Element. Even the normal service pension rates reflected under Regulation 183(1)(a)(i) are categorized as ‘Service Element’.

4.    The fact that the service part of pension, whether a person is released prior to completion of service limits or after completion of service limits (20/15 years), is known as ‘Service Element’ also becomes clear from a perusal of the recent Circular No 554 (Appx D) issued by the Principal Controller of Defence Accounts (Pensions) to all banks, including yours. Paragraphs 1(i) and (ii) and then 1(iv) & 1(v) as well as Paragraph 6 of the same clearly stipulate that in case of disability pensioners, the amount of service part of the pension is known as ‘Service Element’ irrespective of the fact whether a person has lesser or more than 20/15 years of service. In simple words, the service element of pension in cases of those disabled personnel who have completed pensionable limits is equal to normal service pension, but being disability pensioners, it is nomenclatured as ‘Service Element’.

5.    Even otherwise, it would be important to point out that disabled personnel released prior to completion of pensionable terms as well as those who are released on completion of terms or at own request are all treated at par as far as disability pension is concerned. In fact, all those who are in low medical category at the time of release are to be treated as ‘invalided’  as per rules (Also Appx C) as has also been held as per interpretation of teh pre-existing rules by the Hon’ble Delhi High Court in CW 2967/1989 Mahavir Singh Narwal Vs Union of India decided on 05 May 2004 as affirmed by the Hon’ble Supreme Court in SLP 24171/2004 on 04 January 2008 and also in the recent decision of the Hon’ble Supreme Court in Civ Appeal 11208//2011 Union of India Vs Angad Singh Titaria decided on 24 Feb 2015.

6.    In view of the above, you are requested to inform all your branches to cease and desist from flouting guidelines of the Central Board of Direct Taxes in this regard and direct them to honour income tax exemption on both service as well as disability elements of disability pensioners as was being done till now. It may be appreciated that the opinion of your Chartered Accountant cannot override existing law and rules that have been followed since times immemorial.

7.    You are requested to issue directions to refund the illegally deducted amount to all affected disabled pensioners within a period of 7 days from the receipt of this letter.

Thanking You

Sd/-

Navdeep Singh

Advocate, High Court

Railway Board approaches the DOP&T for clerification regarding pay fixation of exservicemen

Pay fixation of reemployed exservicemen is a controversial issue and government departments allows to darw the pay of Retired Commissioned Officers of Armed forces at the same stage as last pay drawn before their retirement.  In case of PBOR they are deprived and allowed to draw only minimum pay of reemployed post which is violation of Article 14 of Constitution of India.  To give parity in this matter attention is hereby invited to the Govt through employer authorities.  Railway Board has approached to DOP&T which is self explanatory and DOP&T can not escape from their duty to clerify the points raised.  To read the letter of Railway Board please click the link below :-


Railway Board  writes to DOPT on Pay fixation of Reemployed Exsm.      Click here.