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Monday, November 14, 2016

Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees under Section 10, Section 24, Section 89(1), Chapter VIA, and Section 87A



Income Tax 2016-17 (A.Year 2017-18) Rate, Exemptions, Deductions and Rebate for Salaried Employees under Section 10, Section 24, Section 89(1), Chapter VIA, and Section 87A

Income Tax Rate 2016-17

TAXABLE INCOME RANGERATE OF INCOME TAX
Up to RS.2,50,000NIL
Rs.2,50,001 to Rs.5,00,00010% of the amount by which the income exceeds Rs.2,50,000
Rs.5,00,001 to Rs.10,00,000Rs.25,000 plus 20% of the amount by which the income exceeds Rs.5,00,000
Above Rs.10,00,001Rs.1,25,000 plus 30% of the amount by which the income exceeds Rs.10,00,000
 Education Cess
3% on Total Income Tax Payble


Section 10 (13A) - Exemption in respect of HRA:

Under Sec. 10(13A), an employee who is in receipt of House Rent Allowance (HRA) can claim exemption, if he does not live in his own house, and pays rent in excess of 10% of his salary for his residential accommodation.
Exemption u/s 10(13A) is the least of the following

  1. Actual amount of HRA received
  2. 50% (for Chennai, Mumbai, Kolkata and Delhi) / 40% (for other places) of the Salary for the relevant period
  3. Rent paid Less 10% of Salary for the relevant period.

Section 87A - Rebate of Income Tax for Taxable income up to Rs. 5 Lakh 

Finance Act 2016 provides for rebate of Income up to Rs. 5000/- in respect of Persons who have Taxable not exceeding Rs. 5 lakh.

Section 10(14) - Transport Allowance and Children Education Allowance (CEA)

Under Section 10(14), the Budget FY 2016-17 lets you claim Rs. 19,200 tax exemption as transport allowance and Rs. 2,400 tax exemption as Children Education Allowance (CEA) in a financial year.

Section 24(b) - Home Loan

If you have taken a Home Loan, then you can claim a tax deduction on the interest component of the loan under Section 24(b). For self-occupied properties, you can benefit from deductions of up to Rs. 2,00,000.

Section 89(1) - Income Tax relief in respect of Arrears of Salary pertaining to previous years

If arrears of salary has been received in Financial year 2016-17 related to previous years then Relief of Income Tax can be claimed u/s 89(1) by accounting income from arrears in respective years on notional basis.

Deductions allowed under Chapter VI A of Income Tax Act

Deduction Limit - Sec 80CCE. As per Section 80CCE, deduction can be claimed upto Rs. 1,50,000 for the payments / contributions made under Sections 80C, 80CCC and 80CCD

Section 80C - Subject to overall limit of Rs. 1,50,000 under Section 80CCE

For investments in specified schemes, saving instruments etc.

  1. Life insurance premium for policy:a) in case of individual, on life of assessee, assessee’s spouse and any child of assessee b) in case of HUF, on life of any member of the HUF
  2. Sum paid under a contract for a deferred annuity:a) in case of individual, on life of the individual, individual’s spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity) b) in case of HUF, on life of any member of the HU
  3. Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]
  4. Contributions by an individual made under Employees’ Provident Fund Scheme
  5. Contribution to Public Provident Fund Account in the name of:a) in case of individual, such individual or his spouse or any child of such individual b) in case of HUF, in the name of any member there of
  6. Contribution by an employee to a recognized provident fund
  7. Contribution by an employee to an approved superannuation fund
  8. Subscription to any notified security or notified deposit scheme of the Central Government.For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21/1/2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction. Amount can be deposited by an individual in the name of her girl child or any girl child for whom such an individual is the legal guardian.
  9. Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]
  10. Contribution for participation in unit-linked Insurance Plan of UTI:a) in case of an individual, in the name of the individual, his spouse or any child of such individual b) in case of a HUF, in the name of any member thereof
  11. Contribution to notified unit-linked insurance plan of LIC Mutual Fund:a) in the case of an individual, in the name of the individual, his spouse or any child of such individual b) in the case of a HUF, in the name of any member thereof
  12. Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]
  13. Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children
  14. Certain payments for purchase/construction of residential house property
  15. Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both
  16. Sum paid towards notified annuity plan of LIC or other insurer
  17. Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)
  18. Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)
  19. Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions
  20. Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in ‘eligible issue of capital’ referred to above. 21. Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme framed and notified.
  21. Subscription to notified bonds issued by the NABARD.
  22. Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)
  23. 5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)



Section 80CCC - Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Contribution to certain specified Pension Funds such as LIC or other authorised Insurance Companies

Section 80CCD(1) - Subject to overall limit of Rs. 1,50,000 under Section 80CCE

Deduction in respect of contributions to National Pension Scheme / System (NPS) notified by Central Government
Limit : 10% of salary in case of employees, 10% of gross total income in case of others

Section 80CCD(1B)

Deduction in respect of the deposit under a pension scheme notified by Central Government (NPS) up to Rs. 50,000/-

Section 80CCD(2)

Deduction in respect of employer contributions to NPS - National Pension Scheme / System - This deduction is available over and above the Rs. 1.5 lakh limit

Section 80 CCG

Amount invested in listed shares covered by Rajiv Gandhi Equity Equity Saving Scheme. Deduction of 50% of total investment subject to maximum of Rs. 25,000 is allowed for 3 consecutive assessment years, beginning with the assessment year relevant to the previous year in which the listed shares or list units of equity oriented funds are first acquired
Section 80D

Amount invested in Health Insurance

In case of Individual, amount paid: a) For self, spouse and dependent children: Up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen) b) For parents: additional deduction of Rs. 25,000 shall be allowed (Rs. 30,000 if parent is a senior citizen or very super senior citizen) In case of HUF, up to Rs. 25,000 (Rs. 30,000 if specified person is a senior citizen or very senior citizen).
The aggregate amount of deduction cannot exceed Rs. 60,000/- in case of an individual.

Section 80DD

Expenditure incurred for the medical treatment of a dependent (spouse, children, parents, brothers and sisters of the individual) up to Rs. 75,000 (Rs. 1,25,000 in case of severe disability)

Section 80DDB

Expenditure incurred for medical treatment of specified diseases for self, or wholly dependent spouse, children, parents, brothers and sisters up to Rs. 40,000 (Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of very senior citizen)

Section 80E

Interest paid on Educational Loan with no limit

Section 80EE

Interest on loan for acquiring residential house property, sanctioned during the financial year 2016-17. The Housing Loan availed should be up to Rs. 35 lakh and should have been availed in the year 2016-17

Section 80G

Deduction in respect of donations to certain funds, charitable institutions, etc.

Section 80GG

Rent paid for residential accommodation from the income of Tax Payer / assessee who is not in receipt of HRA
Least of the following shall be exempt from tax: a) Rent paid in excess of 10% of total income*;
b) 25% of the Total Income; or
c) Rs. 5,000 per month.

Section 80 TTA

Interest on Savings Bank accounts subject to maximum of Rs. 10,000

Section 80U

Exemption of income tax for an income up Rs. 75,000 for persons with disability (Rs. 1,25,000 in case of persons with severe disability)
Source: Incometaxindia.gov.in

Priority to be given to Branch Offices - Directorate



Respected Sir /Madam,

This is regarding the proper functioning of Branch Offices in view of availability of New currency notes. As informed currency is available in all RBI /SBI chests across the country. you are requested to instruct all concerned Post Offices to feed BO with adequate new currency note for supporting withdrawal form accounts.

It is also requested to instruct all Divisions/POs to demand sufficient fund from the Banks to cater the need of Branch Post Offices. If Banks are not providing sufficient cash, same to be reported to concerned Bank authority locally. if Post Offices are still not able to get cash, the same may be escalated to Directorate Control room. 

It is requested to start sending cash to BOs , if Post Offices are receiving required cash (Where Post Office are Open - for today). 

I have been directed to request you to kindly send email giving details on BO deposit, withdrawal and number of transactions with value on daily basis. 

With regards,

Sachin Kishore
Director (CBS)

Revision in Limits of withdrawal of Legal tender Character of existing Rs. 500/- and Rs. 1000/- Bank Notes


From: Director (CBS)


Sent: 14 November 2016 14:22

To: All CPMG; CPMG Telangana Circle
Cc: Member (Banking & HRD)

Subject: Revision in Limits of withdrawal of Legal tender Character of existing Rs. 500/- and Rs. 1000/- Bank Notes

Respected Sir/Madam,

The brief of the changes (as per RBI Circular Dated 13.11.2016) is as follows:- 

  • The limit for exchange of Specified Bank Notes, over the counter has been increased from the existing Rs. 4000/- to Rs. 4500.
  • The daily limit on withdrawal from ATMs has been increased from the existing Rs. 2000/- to Rs. 2500/- per day in the recalibrated ATMs, other ATMs will continue to dispense Rs. 50 and Rs. 100 bank notes until they are re-calibrated.
  • The weekly limit of Rs. 20000/- for withdrawal from accounts has been increased to Rs. 24000 and the daily limit of Rs. 10000/- per day stands withdrawn.

This is for your kind information and further necessary action.


With regards,

Sachin Kishore
Director (CBS)
Sansad Marg,
Dak Bhavan

7th Pay Commission MACP Pay fixation - How to fix pay of central government employees on grant of MACP (Modified Assured Career Progression) on or after 1st January 2016?



MACP Scheme which was introduced on implementation of 6th Pay Commission by revising Annual Career Progression Scheme (ACP) is continued to be effective after implementation of 7th Pay Commission with following changes.


Note for freshers
What is MACP?
This is a non-functional financial upgradation scheme meant for central government employees on completion of 10th, 20th and 30th Years of service when no promotion is granted during this period

1. The benchmark for considering the grant of MACP to Central Government Employees has been increased. Earlier the benchmark recorded in APAR (Annual Performance Appraisal Report) as "Good" will be the minimum eligibility. Now benchmark in APAR for grant of MACP after 7th Pay Commission has been revised to "Very Good".

Accordingly, MACP OM dated 19.04.2009 has been modified by OM O.M. No.F.No.35034/3/2015-Estt.(D), dated 28.09.2016 as follows

"17. For grant of financial upgradation under the MACPS, the prescribed benchmark would be 'Very Good' for all the posts."

2. MACP prior to 7th Pay Commission implementation involves placement in the next grade pay in the grade pay hierarchy and 3% increment in Basic Pay (pay in pay band and grade pay).

After implementation of 7th Pay Commission, financial upgradation under MACP is granted by providing one increment in the existing pay level and placing to equal or next higher pay in the next higher level of pay matrix.

MACP Pay fixation after 7th Pay Commission Implementation as per OM dated 28.09.2016 and Rule 13 of 7th Pay Commission (Revised) Pay Rules 2016:

Illustration 1 : MACP on 1st August 2016:(Applicable to employees granted MACP between 2nd July and 1st January )
1.      7th Pay commission Pay of an employee is fixed as Rs. 34900 in Level 5 (as against grade pay of Rs. 2800 in 6th CPC Pay) as on 1st January 2016.
2.     As on 1st July 2016, he will be entitled to annual increment. Therefore, his pay will be fixed as Rs. 35,900/- at Level 5 Index 8.
3.     He is entitled to MACP as on 1st August 2016.
4.     In this case, financial upgradation under MACP is granted as follows.
Step 1: Existing Pay of Employee which is in Index 8 of Level 5 will be provided with MACP Increment and therefore his pay will be placed in Level 5 - Index 9, viz., in 37,000/-
Step 2. Since there is no pay in the next level (level 6) which is equal to Rs. 37,000/-, the next higher basic pay in Level 6 is Rs. 37,600/- which is at Index 3 of Level 6.

·         The relevant portion of Pay Matrix is given below.
Grade Pay
2400
2800
4200
Entry Pay (EP)
9910
11360
13500
Level
4
5
6
Index
2.57
2.57
2.62
1
25500
29200
35400
2
26300
30100
36500
3
27100
31000
37600
4
27900
31900
38700
5
28700
32900
39900
6
29600
33900
41100
7
30500
34900
42300
8
31400
35900
43600
9
32300
37000
44900
10
33300
38100
46200

·         As per Rule 9 of 7th Pay commission Pay Rules 2016 the next date of annual increment in respect of this employee will be on 1st July 2017.

Illustration 2 : MACP on 1st March 2016:(Applicable to employees granted MACP between 2nd January and 1st July )

1. 7th Pay commission Pay of an employee is fixed as Rs. 55,200/- in Index 6 Level 8 (as against grade pay of Rs. 4800 in 6th CPC Pay) as on 1st January 2016.

2. He is entitled to MACP as on 1st March 2016.

3. As per O.M. No.F.No.35034/3/2015-Estt.(D), dated 28.09.2016, recommendations of 7th Pay Commission on MACP takes effect from 25th July 2016.

4. (i) Hence, an employee who is granted financial upgradation under MACP in the year 2016 between 2nd January to 1st July, can have his/her MACP pay fixed in 7th CPC Pay Matrix only if he/she exercise the option under FR22(I) a(1) for fixation of pay from 1st January 2017 viz., the next date of his/her annual increment.


Note: As per FR 22 (I) (a) (1), central government employees have the option, to have their pay fixed from the date of promotion / MACP or from the date of next increment.

Note: As per Rule 9 of 7th Pay Commission Revised Pay Rules 2016, An employee who is granted MACPS during the period between 2nd day of January, 2016 and 1st day of July, 2016, and who did not draw any increment on 1st day of July, 2016, the next increment shall accrue on 1st day of January, 2017

(ii) If an employee who is granted MACP in the year 2016 did not opt for moving his/her MACP pay fixation from the next date of increment i.e in January 2017, under FR 22 (I) (a) (1), he / she would end up with MACP Pay Fixation in pre-revised pay (6th CPC Pay) as on 1st March 2016 by exercising the option to defer the fixation 7th Pay Commission implemented pay until 1st March 2016 under Rule 5 of 7th Pay Commission Rules 2016.

(iii) Since, MACP in 7th Pay Commission Pay matrix takes effect from 25th July 2016, Employees who are granted financial upgradation under MACP from the year 2017, between 2nd January to 1st July, can have their pay fixed without exercising the option under FR22(I) a(1).

5. In this case, the most beneficial financial upgradation under MACP will be option chosen as detailed in 4 (i) above and the same is granted as follows.

Step 1: Grant of Annual increment of employee from 1st January 2017 will precede MACP fixation. Therefore, after annual increment his pay will be fixed at Rs. 56,900/- in the Index 7 Level 8.

Step 2: Then the employee will be provided with MACP Increment and therefore his pay will be placed at Rs. 58,600/ in Index 8 Level 8.

Step 3. Since there is no pay in the next level (level 9) which is equal to Rs. 58,600/-, the next higher basic pay in Index 5 Level 9 is Rs. 59,700/-. So, on MACP fixation the pay of employee will be fixed at Rs. 59,700/-.

The relevant portion of Pay Matrix is given below.
Grade Pay
4600
4800
5400
Entry Pay (EP)
17140
18150
20280
Level
7
8
9
Index
2.62
2.62
2.62
1
44900
47600
53100
2
46200
49000
54700
3
47600
50500
56300
4
49000
52000
58000
5
50500
53600
59700
6
52000
55200
61500
7
53600
56900
63300
8
55200
58600
65200
9
56900
60400
67200
10
58600
62200
69200
As per Rule 9 of 7th Pay commission Pay Rules 2016, The next date of annual increment in respect of this employee will be on 1st January 2018.