Thought for Today, 29 th June 2020

Life is a trip. The only problem is that it does not come with a map. We have to search our own routes to reach our destination.

Thursday, June 30, 2011

What Is The Difference Between EPF, GPF And PPF ?

What is the differences between EPF, GPF and PPF?

EPF- Employees Provident Fund 
GPF - General Pension Fund 
PPF - Public Provident Fund

GPF - General Provident Fund which is for the Government Employees 
PPF - Individuals can save to a maximum of Rs.60000/- in a year in the account. Account can be maintained in a Post Office. 
EPF - Employees Provident Fund for Private sector where 12% of Employees share and 12 % of Employer's share of Basic Salary + DA is deducted and remitted to PF Authorities

PF vs PPF: What's the difference ?

1. What is PPF and PF? 
EPF/ PF (Employees Provident Fund / Provident Fund) 

The Employee Provident Fund, or provident fund as it is normally referred to, is a retirement benefit scheme that is available to salaried employees.

Under this scheme, a stipulated amount (currently 12%) is deducted from the employee's salary and contributed towards the fund. This amount is decided by the government.

The employer also contributes an equal amount to the fund.

However, an employee can contribute more than the stipulated amount if the scheme allows for it. So, let's say the employee decides 15% must be deducted towards the EPF. In this case, the employer is not obligated to pay any contribution over and above the amount as stipulated, which is 12%.

PPF (Public Provident Fund) 

The Public Provident Fund has been established by the central government. You can voluntarily decide to open one. You need not be a salaried individual, you could be a consultant, a freelancer or even working on a contract basis. You can also open this account if you are not earning.

Any individual can open a PPF account in any nationalised bank or its branches that handle PPF accounts. You can also open it at the head post office or certain select post offices.

The minimum amount to be deposited in this account is Rs 500 per year. The maximum amount you can deposit every year is Rs 70,000.

2. What is the return on this investment?

EPF: 8.5% per annum

PPF: 8% per annum

3. How long is the money blocked?


The amount accumulated in the PF is paid at the time of retirement or resignation. Or, it can be transferred from one company to the other if one changes jobs.

In case of the death of the employee, the accumulated balance is paid to the legal heir.


The accumulated sum is repayable after 15 years.

The entire balance can be withdrawn on maturity, that is, after 15 years of the close of the financial year in which you opened the account.

It can be extended for a period of five years after that. During these five years, you earn the rate of interest and can also make fresh deposits.

Save tax and get rich

4. What is the tax impact?


The amount you invest is eligible for deduction under the Rs 1,00,000 limit of Section 80C.

If you have worked continuously for a period of five years, the withdrawal of PF is not taxed.

If you have not worked for at least five years, but the PF has been transferred to the new employer, then too it is not taxed.

The tenure of employment with the new employer is included in computing the total of five years.

If you withdraw it before completion of five years, it is taxed.

But if your employment is terminated due to ill-health, the PF withdrawal is not taxed.


The amount you invest is eligible for deduction under the Rs 1,00,000 limit of Section 80C.

On maturity, you pay absolutely no tax.

5. What if you need the money?


If you urgently need the money, you can take a loan on your PF.

You can also make a premature withdrawal on the condition that you are withdrawing the money for your daughter's wedding (not son or not even yours) or you are buying a home.

To find out the details, you will have to talk to your employer and then get in touch with the EPF office (your employer will help you out with this).


You can take a loan on the PPF from the third year of opening your account to the sixth year. So, if the account is opened during the financial year 1997-98, the first loan can be taken during financial year 1999-2000 (the financial year is from April 1 to March 31).

The loan amount will be up to a maximum of 25% of the balance in your account at the end of the first financial year. In this case, it will be March 31, 1998.

You can make withdrawals during any one year from the sixth year. You are allowed to withdraw  50% of the balance at the end of the fourth year, preceding the year in which the amount is withdrawn or the end of the preceding year whichever is lower.

For example, if the account was opened in 1993-94 and the first withdrawal was made during 1999-2000, the amount you can withdraw is limited to 50% of the balance as on March 31, 1996, or March 31, 1999, whichever is lower.

If the account extended beyond 15 years, partial withdrawal -- up to 60% of the balance you have at the end of the 15 year period -- is allowed.

Courtesy :

Thursday, June 23, 2011

Scheme of Exempting Salaried Tax Payers with Income Up To Rs. 5 Lakhs From Filing Income Tax Return

Individuals having total income up to Rs.5,00,000 for FY 2010-11, after allowable deductions, consisting of salary from a single employer and interest income from deposits in a saving bank account up to Rs.10,000 are not required to file their income tax return. Such individuals must report their Permanent Account Number (PAN) and the entire income from bank interest to their employer, pay the entire tax by way of deduction of tax at source, and obtain a certificate of tax deduction in Form No.16.

Persons receiving salary from more than one employer, having income from sources other than salary and interest income from a savings bank account, or having refund claims shall not be covered under the scheme.

The scheme shall also not be applicable in cases wherein notices are issued for filing the income tax return under section 142(1) or section 148 or section 153A or section 153C of the Income Tax Act 1961.

Monday, June 20, 2011

Employee Under Suspension --Revision of pay as per 6th Pay Commission

The pay scales of Central Government employees and Maharashtra state government employees have been revised as per recommendations of 6th pay commission. However from the e mails received from the viewers of the blog it appears the departmental officers are not fully aware as to how and when  the pay of the employees under suspension is to be revised with the result that the pay of the  employees  who were not under suspension on 1-1-2006 but suspended thereafter has not been revised and they are being paid the subsistence allowance calculated on the basis of old pay scale. Therefore the following clarification is issued as regards pay revision in case of employees under suspension.

1)  In case of  an employee who was suspended prior to 1-1-2006 and who is still under suspension, the revision of pay will not be done and he will be continued to draw the subsistence allowance fixed on the basis of his pay in the prerevised pay scale.
2) In case of an employee who was suspended prior to 1-1-2006 and then reinstated after completion of conduct of departmental inquiry, the pay will have to be fixed considering the order  passed by the disciplinary as regards the treatment of suspension period and the option of selection of pay scale exercised by him.

 3 )   An  employee suspended after 1-1-2006 and who is continued to be under suspension,  should be allowed to exercise the option of electing the revised pay scale , even if the date by which he is to exercise the option falls during the period of suspension. Such employee is entitled to the benefit of increase in pay, if any, including the arrears in respect of the period from 1-1-2006 to the date of suspension  and also in the subsistence allowance (including arrears) consequent  to increase in pay.
4) An employee suspended after 1-1-2006 and then reinstated after completion of departmental  inquiry against him,  should be allowed to exercise the option and his pay should be fixed as per revised pay rules.  He should be paid arrears if any for the period from 1-1-2006 to the date of suspension.His pay from the date of reinstatement should be fixed considering the final order imposing penalty  passed by the competent authority and also the order regarding treatment of suspension and payment of  pay and allowances during the suspension period.

Monday, June 13, 2011

Pension can''t be withheld due to pending criminal case: CAT

Pension and increments of a public servant cannot be withheld only on the basis a pending criminal case against him unless he is convicted, the apex administrative tribunal has held.
"It is amply clear that only on the basis of the case pending against the applicant (Primary School Head Master Lakhi Ram), pension cannot be withheld under Central Civil Services (CCS Pension) Rules, 1972," a two-member bench of Central Administrative Tribunal headed by Justice Meera Chhibber said.
The bench also favoured releasing gratuity during the pendency of criminal case but with an earlier judgement of the CAT ruling against it, the bench referred the question on the gratuity issue to a larger bench.
"Gratuity cannot be withheld under rules of CCS Pension Rules. Otherwise also as per the provision (of) Payment of Gratuity Act, 1972, gratuity cannot be withheld," it said.
"Since we have taken a different view about release of gratuity during the pendency of criminal case than what had been held by the coordinate bench in another case in 2009, the matter may be placed before the chairman on administrative side for constitution of a larger bench to determine the clear position of law on the subject," the bench said.
The judgement came on a petition filed by Lakhi Ram, a Municipal Corporation of Delhi-run primary school headmaster, who retired in August 2007.
He had been suspended on August 13, 2001 after his arrest in criminal case relating to a property dispute.
Though he was reinstated in May 2005 and retired in 2007, his annual increments were stopped from 2001 and were not restored even after his reinstatement in service.
The court directed Education Department of Municipal Corporation of Delhi to grant increments to him from the date of his reinstatement to his superannuation and to fix his pay as per the sixth pay revision and determine his provisional pension.
Source: Yahoo News

Friday, June 10, 2011

Departmetal Inquiry In absence Of Presenting Officer- More Clarification

Some of the viewers of the blog has still doubt  relating the conduct of departmental inquiry in absence of presenting officer and therefore the following clarification.

 Departmental Inquiry by whom?

Let us understand that the rules provide that the departmental inquiry can be conducted by the disciplinary authority itself or by appointing an independent inquiry officer. However it is desirable that an independent inquiry officer is appointed when a grave misconduct is committed and a major penalty is proposed to be imposed.

Appointment of presenting officer, when?

Rules provide that whenever the inquiry is to be conducted by independent inquiry officer, the departmental inquiry officer may appoint presenting officer. The presenting officer is appointed so that the case of the disciplinary authority can be forcefully pleaded and the charges leveled against the delinquent employee are proved.  The court has held in the case referred by me in earlier mail that the presenting officer should be appointed when oral evidence i.e. examination of witnesses, is to be produced .If the presenting officer is not appointed, the case of the disciplinary authority may not be forcefully    pleaded.   Even in the absence of the presenting officer, the charges may be proved on the basis of documentary and oral evidence.

Role of Inquiry officer in absence of presenting officer

The inquiry officer must remember that his role is not that of prosecutor. He has discretion to ask questions to the witnesses but only to find out the facts. He should not cross-examine the witnesses.

Inquiry in absence of presenting officer

  The inquiry held will not be vitiated or held illegal only on the ground of not appointing presenting officer or absence of presenting officer.

Saturday, June 04, 2011


The departmental inquiry can be conducted by the disciplinary authority itself or by appointing an independent inquiry officer.However it is always desirable to appoint independent inquiry officer for making inquiry under Rule 14 for imposing major penalty so as to avoid any allegations of bias on the part of disciplinary authority. In fact the disciplinary authority should refrain from being an inquiry officer.

 Rule  8 (5)(c) of  M.C.S. (D.& A. ) Rules 1979 provides that where the disciplinary authority  appoints an inquiring authority for holding an inquiry , it may ,by an order ,appoint a Government servant or a legal practitioner to be known as " presenting officer" to present on its behalf the case in support of charge.In fact it is always desirable that a presenting officer is appointed so that the case of the disciplinary authority can be effectively presented and the charges  against the  delinquent employee are proved. Madras high court in case of T.N.Govindrajan v/s Management of Overseas Bank has held that where the regulations provide that the disciplinary authority may  appoint a presenting officer , the disciplinary authority should appoint a presenting officer, if the inquiry officer  has to consider oral evidence led on behalf of the disciplinary authority because the inquiry officer should not be left with the position to to examine the witnesses on behalf of the disciplinary authority.
Taking in to consideration the facts mentioned above it would be clear that the disciplinary authority must appoint a presenting officer otherwise it may be alleged that  appointment of presenting officer was  deliberately not  made with an ulterior motive to exonerate the delinquent employee from the charges levelled against him.

Friday, June 03, 2011

Increase in the Element Of Concession to men senior citizens from 30% to 40% and Reduction in age limit for women citizens fro 60 10 58

No.TC11/2161/2011/SRC/Policy                                                                                         New Delhi, dated 13 5.2011

The General Managers (Comml),
All Indian Railways.
Sub: Increase in the element of concession to men senior citizens from 30% to 40% and reduction in the age limit for women senior citizens from 60 to 58 years.

As per existing provisions contained in S.No.36 of Annexure to rule 101 of IRCA Coaching Tariff No. 25, Part-I (Vol. II), Senior citizens of minimum 60 years are eligible for concession in the basic fares of Mail/Express trains and all inclusive fares of Rajdhani / Shatabdi /Jan Shatabdi trains. The element of concession is 30% for men senior citizens and 50% for women senior citizens.
2. As announced by Hon’ble MR in Budget Speech for 2011-12, it has been decided to reduce the minimum age for availing concession from 60 years to 58 years in case for women senior citizens. However, the element of concession will continue to remain at 50%.
3. It has also been decided to increase the element of concession in case of men senior citizens from 30% to 40%. The minimum age will, however, continue to be 60 years in case of men.
4. There will be no change in other terms and conditions.
5. This concession will be admissible on tickets purchased on and after 01.06.2011. In case of tickets already issued for travel on & after 01.06.2011, refund of difference of fares will not be admissible.
6. This issues with the concurrence of the Finance Directorate of the Ministry of Railways.
7. Wide publicity through various media may be given at regular intervals. Necessary instructions may be issued to all concerned immediately including PRS/UTS immediately and compliance ensured.

(Dr.Monica Agnihotri)
Director Passenger Marketing
Railway Board