Showing posts with label Gratuity. Show all posts
Showing posts with label Gratuity. Show all posts

Friday, July 27, 2018

Retirement Benefits for CG Employees


Retirement Benefits for CG Employees


Pension

The minimum eligibility period for receipt of pension is 10 years. A Central Government servant retiring in accordance with the Pension Rules is entitled to receive pension on completion of at least 10 years of qualifying service.
In the case of Family Pension the widow is eligible to receive family pension on death of her spouse after completion of one year of continuous service or even before completion of one year if the Government servant had been examined by the appropriate Medical Authority and declared fit for Government service.
W.e.f 1.1.2006, Pension is calculated with reference to emoluments (i.e.last basic pay) or average emoluments (i.e. average of the basic pay drawn during the last 10 months of the service) whichever is more beneficial. The amount of pension is 50% of the emoluments or average emoluments whichever is beneficial.
Minimum pension presently is Rs. 9000 per month. Maximum limit on pension is 50% of the highest pay in the Government of India (presently Rs. 1,25,000) per month. Pension is payable up to and including the date of death.

Commutation of Pension

A Central Government servant has an option to commute a portion of pension, not exceeding 40% of it, into a lump sum payment. No medical examination is required if the option is exercised within one year of retirement. If the option is exercised after expiry of one year, he/she will have to under-go medical examination by the specified competent authority.
Lump sum payable is calculated with reference to the Commutation Table. The monthly pension will stand reduced by the portion commuted and the commuted portion will be restored on the expiry of 15 years from the date of receipt of the commuted value of pension. Dearness Relief, however, will continue to be calculated on the basis of the original pension (i.e. without reduction of commuted portion).
The formula for arriving for commuted value of Pension (CVP) is CVP = 40 % (X) Commutation factor* (X)12
* The commutation factor will be with reference to age next birthday on the date on which commutation becomes absolute as per the New Table annexed to the CCS (Commutation of Pension) Rules, 1981.

Death/Retirement Gratuity

Retirement Gratuity This is payable to the retiring Government servant. A minimum of 5 years’ qualifying service and eligibility to receive service gratuity/pension is essential to get this one time lump sum benefit. Retirement gratuity is calculated @ 1/4th of a months Basic Pay plus Dearness Allowance drawn on the date of retirement for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable for qualifying service of 33 years or more is 16 times the Basic Pay plus DA, subject to a maximum of Rs. 20 lakhs.
Death Gratuity This is a one-time lump sum benefit payable to the nominee or family member of a Government servant dying in harness. There is no stipulation in regard to any minimum length of service rendered by the deceased employee. Entitlement of death gratuity is regulated as under:
Qualifying Service
Rate
Less than one year
2 times of basic pay
One year or more but less than 5 years
6 times of basic pay
5 years or more but less than 11 years
12 times of basic pay
11 years or more but less than 20 years
20 times of basic pay
20 years or more
Half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments.
Maximum amount of Death Gratuity admissible is Rs. 20 lakhs w.e.f. 1.1.2016
Service Gratuity A retiring Government servant will be entitled to receive service gratuity (and not pension) if total qualifying service is less than 10 years. Admissible amount is half months basic pay last drawn plus DA for each completed 6 monthly period of qualifying service. This one time lump sum payment is distinct from retirement gratuity and is paid over and above the retirement gratuity.
Issue of No Demand Certificate Dues owed by the retiring employees on account of Licence Fee for Government accommodation, advances, over payment of pay and allowances are required to be assessed by the Head of Office and intimated to the Accounts Officer two months in advance of the date of retirement so that these are recovered from retirement gratuity before payment. For this purpose the Licence Fee for those in occupation of Government accommodation is taken into account up to the end of the permissible period for which accommodation can be retained after retirement under the Rules on normal rent. The recovery of Licence Fee beyond that period is the responsibility of the Directorate of Estates. If, for any reason final dues cannot be assessed on time, then 10% of gratuity is withheld from gratuity on the basis of a commutation from the Directorate of Estates in this regard.
General Provident Fund and Incentives
As per General Provident fund (Central Services) Rules, 1960 all temporary Government servants after a continuous service of one year, all re-employed pensioners (Other than those eligible for admission to the Contributory Provident Fund) and all permanent Government servants are eligible to subscribe to the Fund. However, these rules are not applicable to any of the Government Servants who join service on or after 1.1.2004. A subscriber, at the time of joining the fund is required to make a nomination, in the prescribed form, conferring on one or more persons the right to receive the amount that may stand to his credit in the fund in the event of his death, before that amount has become payable or having become payable has not been paid. A subscriber shall subscribe monthly to the Fund except during the period when he is under suspension. Subscriptions to the Provident Fund are stopped 3 months prior to the date of superannuation. Rates of subscription shall not be less than 6% of subscribers emoluments are not more than his emoluments. Rate of interest varies according to notifications of the Government issued from time to time. The rules provide for drawal advances/ withdrawals from the fund for specific purposes. The conditions for withdrawal from the fund have been liberalized and now no documentary proof is required to be furnished by the subscriber for GPF withdrawal. On retirement of a subscriber, instructions have been issued for immediate payment of final balance on retirement. No application is required to be submitted by the subscriber for final payment from the fund. .
Deposit Linked Insurance Scheme
Under the GPF Rules, on the death of subscriber, the person entitled to receive the amount standing to the credit of the subscriber shall be paid an additional amount equal to the average balance in the account during the 3 years immediately preceding the death of the subscriber subject to certain conditions provided in the relevant Rule. The additional amount payable under that Rule shall not exceed Rs. 60,000/-. To get this benefit, the subscriber should have put in at least 5 years service at the time of his/her death.
Contributory Provident Fund
The Contributory Provident Fund Rules (India), ,1962 are applicable to every non-pensionable servant of the Government belonging to any of the services under the control of the President. A subscriber, at the time of joining the Fund is required to make a nomination in the prescribed Form conferring on one or more persons the right to receive the amount that may stand to his credit in the Fund in the event of his death, before that amount has become payable or having become payable has not been paid.
A subscriber shall subscribe monthly to the Fund when on duty or Foreign Service but not during the period of suspension. Rates of subscription shall not be less than 10% of the emoluments and not more than his emoluments. The employer’s contribution at that percentage prescribed by the Government will be credited to the subscriber’s account and this is 10%. The Rules provide for drawal of advances/ withdrawals from the CPF for specific purposes. As in GPF Rules, the CPF Rules also provide for Deposit Linked Insurance Scheme.

Leave Encashment

Encashment of leave is a benefit granted under the CCS (Leave) Rules and is not a pensionary benefit. Encashment of Earned Leave/Half Pay Leave standing at the credit of the retiring Government servant is admissible on the date of retirement subject to a maximum of 300 days.

Central Government Employees Group Insurance Scheme

A portion of monthly contributions paid while in service is credited in a Saving Fund, on which interest accrues. A Government servant while entering service has to apply in Form No. 4 of the above Scheme to the Head of Office, who shall issue a sanction for the payment of subscriber’s accumulation in the Savings Fund segment together with interest and arrange for its disbursement, soon after retirement. Payments under this Scheme are made in accordance with the Table of Benefit (as issued by Department of Expenditure) which takes in to account interest up to the date of cessation of service. Insurance cover benefit under this Scheme is available to the family in the event of death of the subscriber.
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Thursday, May 31, 2018

Brief on Payment of Gratuity (Amendment) Act, 2018


Brief on Payment of Gratuity (Amendment) Act, 2018

” Representatives are requesting to this Ministry that the effective date of Payment of Gratuity (Amendment) Act, 2018 will 01.01.2016 instead of 29.03.2018 at par with the Central Government employees’

1. The Payment of Gratuity (Amendment) Bill, 2018 has been passed the 14th Sabba Sabha on 15.03.2018 and 22.03.2018 respectively and assented to by the Hon’ble President on 28th March, 2018.

2. The Government vide notification No.1420(E) dated 29th March, 2018 has enhanced the gratuity ceiling under the Payment of Gratuity Act, 1972 from Rs.10 lakh to Rs.20 Lakh with effect from 29th March, 2018.

3. A Large number of representations have been received in this Ministry from the Unions/Organizations/Individuals physically, through Social Media (Facebook/Twitter etc.) and PG Portal whereby the representatives are requesting to this Ministry that the effective date of Payment of Gratuity (Amendment) Act, 2018 will 01.01.2016 instead of 29.03.2018 at par with the Central Government employees’

4. In this regard, it is infirmed that on earlier occasions also, the enhancement in gratuity ceiling under the Payment of Gratuity Act, 1972 has been implemented with prospcetive date only. Further, implementation of the same with effect will be administratively difficult and employers may not have sufficient liquidity to meet the arrears liabilities.
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Friday, March 30, 2018

Gazette Notification on Gratuity: Amount, Effective Date and Maternity Leave


Gazette Notification on Gratuity: Amount, Effective Date and Maternity Leave

“Gratuity Ceiling Amendment Notifications issued by Government of India regarding Upper limit of Gratuity Payment, Date on which come into force and Maximum Period of Maternity Leave…

MINISTRY OF LABOUR AND EMPLOYMENT
NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1419(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Payment of Gratuity (Amendment) Act, 2018 (12 of 2018), the Central Government hereby appoints the 29th day of March, 2018 as the date on which the said Act shall come into force.

[No.S-42012/02/2016-SS-II] 
MANISH GUPTA, Jt. Secy.

NOTIFICATION
New Delhi, the 29th March, 2018

S.O. 1420 (E).—In exercise of the powers conferred by sub-section (3) of section 4 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies that the amount of gratuity payable to an employee under the said Act shall not exceed twenty lakh rupees.

[No.S-42012/02/2016-SS-II] 
MANISH GUPTA, Jt. Secy.

NOTIFICATION

New Delhi, the 29th March, 2018

S.O. 1421 (E).—In exercise of the powers conferred by clause (iv) of the Explanation to sub-section (2) of section 2A of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies for the purposes of the said clause that the total period of maternity leave in the case of a female employee shall not exceed twenty-six weeks.
[No.S-42012/02/2016-SS-II] 
MANISH GUPTA, Jt. Secy.
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Friday, December 27, 2013

Payment of statutory dues, salary and wages in sick,loss making CPSEs

Press Information Bureau
Government of India

The Cabinet Committee on Economic Affairs (CCEA) today approved the proposal for providing non-plan budgetary support of Rs. 116.86 crore for liquidation of statutory dues (Provident Fund, Gratuity, Pension, Employees State Insurance and Bonus) and salary and wages from 01-04-2013 to 31-08-2013 in respect of eleven Central Public Sector Enterprises (CPSEs) under the Department of Heavy Industry, namely Hindustan Cables Ltd., HMT Machine Tools Ltd., HMT (Watches) Ltd., HMT (Chinar Watches) Ltd., Nagaland Pulp & Paper Co. Ltd., Triveni Structurals Ltd., Tungbhadra Steel Products Ltd., Nepa Ltd., HMT Bearings Ltd. Hindustan Photo Films Limited and Tyre Corporation of India Ltd.

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Sunday, November 17, 2013

Clarification regarding rule position for payment of gratuity to the employees covered under New Pension Scheme.

No.7/2/2013-P&PW(F)
Government of India
Ministry of Personnel, PG & Pensions
Department of Pension &Pensioners Welfare
(Desk-F)

3rd Floor, Lok Nayak Bhavan,
NewDelhi- 10003
Dated the 15th October, 2013

Office Memorandum

Subject : Clarification regarding rule position for payment of gratuity to the employees covered under New Pension Scheme

   The undersigned is directed to refer to Ministry of Defence OM.No12(15)/2013-D(Civ.II) dated 12.7.2013 & 26.9.2013 on the subject noted above and to say that the provision of CCS(Pension) rules are not applicable to government servants appointed on or after 1.1.2004. This department is in the process of framing rules on New Pension scheme.

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Wednesday, July 24, 2013

Pensioners Portal Order 2013: Withholding of 10% gratuity from the retiring Government servants - clarification regarding.

No.20/16/1998-P&PW (F)
Government of India
Ministry of Personnel Public Grievances and Pensions
Department of Pension and Pensioners Welfare

3rd Floor, Lok Nayak Bhawan,
Khan Market, New Delhi-110 003
Dated the 11th July, 2013.

OFFICE MEMORANDUM

Sub: Withholding of 10% gratuity from the retiring Government servants - clarification regarding.

   The undersigned is directed to refer to this Department's OM of even number dated the 19th February 2013 on the above cited subject and to say that this Department is still receiving representations from individuals and Pensioners Associations that Government Departments have been withholding 10% of the amount of gratuity from retirees even when they had not been provided any Government accommodation. This is in contravention of existing instructions.

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Wednesday, February 20, 2013

Withholding of 10% gratuity from the retiring Government servants -clarification regarding.

No.20/16/1998-P&PW(F)
Government of India
Ministry of Personnel Public Grievances and Pensions
Department of Pension and Pensioners Welfare

3rd Floor, Lok Nayak Bhawan,
Khan Market, New Delhi-110 003
Dated the 19th February 2013.

OFFICE MEMORANDUM

Subject:- Withholding of 10% gratuity from the retiring Government servants -clarification regarding.

   The undersigned is directed to say that this Department has been receiving representations from individuals and Pensioners Associations that Government Departments have been withholding 10% of the amount of gratuity from each retirees even when they had not been provided any Government accommodation.

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Sunday, February 26, 2012

Payment of arrear to Post—2006 retirees on account of Pension/Family Pension/Gratuity and Leave Encashment.

No. Fin (Pen) A (3)-1/09- Part-I
Government of Himachal Pradesh
Finance (Pension) Department

Dated: Shimla-171002, 14th February, 2012

Office Memorandum

Subject: - Payment of arrear to Post—2006 retirees on account of Pension/Family Pension/Gratuity and Leave Encashment.

   In continuation to this Department's Office Memorandum of even number dated the 29th March, 2010, 2nd November, 2010,10th March, 2011 and 17th August, 2011 on the subject cited above, the undersined is directed to say that the Governor. Himachal Pradesh, is pleased to order that 50% of the total balance arrears of each element of pension/ family pension/ gratuity and leave encashment may be released immediately to those Government servants who had retired between 1.1.2006 to 30.9.2009. The total cumulative arrears released so far after taking into account the present release, shall amount to 75% of the total arrears accrued to the Post-2006 Pensioners/ Family Pensioner.

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Monday, February 14, 2011

Tax exemption on gratuity


The government has hiked the limits of gratuity payment from Rs 3.5 lakhs to Rs 10 lakhs. This enhanced limit is applicable to employees who retire, become incapacitated before retirement, expire or whose services were terminated on or after May 24, 2010.

As per Section 10(10) of Income Tax Act, gratuity is paid when an employee completes five or more years of full-time service with the employer. In respect of government employees, any death-cum-retirement gratuity received under the pension rules or scheme of the central or state government, or regulations applicable to the members of defence services, is not taxable.

In case of gratuity received under the Gratuity Act, 1972, any gratuity received to the extent that it does not exceed an amount calculated in accordance with the provisions of the Gratuity Act is not taxable. For employees receiving gratuity other than under the government pension or gratuity scheme and also other than under the Payment of Gratuity Act, the computation mechanism in respect of exemption limits has been specified in the IT Act. The Central Board of Direct Taxes (CBDT) has issued a notification increasing the overall tax exemption to Rs 10 lakhs.

The gratuity received by an employee is not taxable if it is received on his retirement, his becoming incapacitated prior to such retirement, termination of employment or if such gratuity is received by his widow, children or dependants on his death. Further, such gratuity does not exceed one-half month’s salary for each year of completed service, calculated on the basis of the average salary for 10 months immediately preceding the month in which such retirement or death takes place, subject to the limits prescribed by the central government.

Salary for this purpose includes dearness allowance, but excludes all other allowances and perquisites. Also, as per some judicial precedents, completed service would mean a total period of service whether under one employer or more.

In case any such gratuities are received by an employee from more than one employer in the same financial year, the aggregate amount so exempt should not exceed the overall exemption limit. Similarly, if gratuities were received in one or more financial years, the exempt amount claimed earlier has to be taken into account while computing the exemption at present.

Courtesy;Economictimes
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