1. I.A. No. 9 of 2010 in T.P. (Civil) No. 56/2007, an application for modification/ recalling of final order dated 08.03.2010 and re-hearing of the matter, filed by Union of India came up for hearing today on 15.11.2010. The aforesaid T.P. was filed by the Union of India with a prayer to transfer several writ petitions pending in the various High Courts regarding correct fixation of rank pay as recommended by the IVth Pay Commission and accepted by the Central Government, to be effected from 01.01.1986 in respect of the officers of the Armed Forces and finally decided on 08.03.2010 in favour of the officers.
2. The aforesaid I.A. was listed for hearing before the Bench of Hon’ble Justice Markandey Katju and Hon’ble Justice Gyan Sudha Mishra before Court – 6 as Item No. 4 today i.e. 15.11.2010. Some connected matters were also listed. It may be noted that the Hon’ble Supreme Court has already passed final order in the aforesaid matters on 08.03.2010 and directed the Central Government to pay the rank pay to the affected officers w.e.f. 01.01.1986 along with 6% interest. Surprisingly, instead of implementing the aforesaid directions, UOI had filed an application for modification and recalling of the order dated 08.03.2010 and for re-hearing of the matters. The respondents i.e. writ petitioners in the High Court of Kerala and Ex-servicemen organizations namely Retired Defence Officres Association, Disabled War Veterans of India, Naval Chapter and Purva Sainik Prishad were represented by Advocates, Mr. Mahabir Singh, Gp Capt Karan Singh Bhati (Retd.) and Ms Aishwarya Bhati.
3. In the connected matter, W.P. (Civil) No. 291/2010 – “Pushpawanti Versus Union of India” wherein a pension of rs. 80/- p.m. was being paid to the widow of a highly decorated Major, the Hon’ble Court has been pleased to pass detailed directions for the formation of Commission, headed by Hon’ble Mr. Justice Kuldeep Singh, Retired Judge of the Supreme Court, Hon’ble Mr. Justice S.S. Sodhi, Retired Judge of Allahabad High Court, General V.P. Malik, Former Chief of Army Staff and Lt. General Vijay Oberoi (Retd.) and one member i.e. Civil Servant either serving or retired, to be nominated by the Union of India to look into and make recommendations with regard to the grievances of serving and retired Defence personnel like one rank one pension and other disparities and anomalies, without limiting the scope of reference. The matter will continue to be monitored by the Hon’ble Supreme Court.
4. The Hon’ble Court was very clear on the purpose and backdrop of the need for setting up such a Commission to provide an equitable Forum to look into and make recommendations for a fair redressal of grievances of the Men-In-Uniform, who had been at the receiving end of the Governmental/ Bureaucratic Apathy and indifference for years and decades.
5. The Hon’ble Court was extremely moved with instances of pittance being paid as pension to widows of highly decorated officers who laid down their lives for the Nation and years of indifferent and unfair policies leading to officers and men taking extreme steps of returning their gallantry medals and even burning their artificial limbs which were fixed upon loosing natural limbs in war/ action. The Hon’ble Court had specifically expressed its concern and intention on earlier occasions also when these matters were being heard and had directed the Union of India to file an affidavit on these lines, while expressing that the Commission could be formed by the court suo-moto also, however, the intention was to include the Union of India in the decision making process since such high degree of discontentment which was apparent among the personnel of Defence Forces, is not good for the country.
6. The Union of Indian had filed an additional affidavit in the aforesaid T.P. and connected matters, pursuant to the directions of this Hon’ble Court and the entire tone and tanner of the affidavit was to question the final order dated 08.03.2010 passed by the Hon’ble Supreme Court for grant of rank pay with arrears and 6% interest and acting in disregard to the directions of the Hon’ble Supreme Court passed on 08.03.2010 and to somehow impress upon the court that all the grievances of defence personnel were being looked into by the Government. Interestingly, the Union of India, through the affidavit of under Secretary in the Ministry of Defence, only consented to referring the issue of fixation of rank pay to the proposed Commission and expressed its inability to consent to any other terms of reference.
7. During the hearing of the matter today, the Hon’ble Court termed the affidavit of the Union of India as contemptuous and disregarded the same. It was clear that the Hon’ble Court was disturbed with the attitude of the Government when the court pointed out that no law required consent from the Union of India to pass directions with regard to the setting up a Commission. The Hon’ble Court also refused to refer the issue of rank pay fixation to the Commission since it has already been settled in favour of the officers by the order of the Hon’ble Supreme court itself dated 08.03.2010 in T.P. (Civil) No. 56/2007. The Application for modification and recalling the order dated 08.03.2010 has been referred to the Chief Justice of India for placing the same before another Bench.
Lt Col BK Sharma
President, RDOA
Jan 25, 2011
ARMY OFFICER'S BENEVOLENT FUND PLATINUM GRANT AT 75 YRS AGE.
Retired army officers, who have completed 75 years of age, are entitled to a grant of Rs 50,000.00 from the Army Officers Benevolent Fund.Kindly share this information among the retired Army Officers in your city. In case of demise of an officer, during service or later before completing 75 years, this amount is payable to the next of kin immediately after the demise of the officer. It is also applicable to officers settled abroad). No formal application is required for claiming the platinum grant. However the retired officers are required to intimate their postal addresses and Bank Account Numbers as and when they enter their 75th year at following address for updating the records :-
Director Accounts, Ceremonial & Welfare Directorate
Adjutant General's Branch, Army Headquarters, South Block, Room No 279,
DHQ PO New Delhi – 110011
Tele No - 2337 5138
Ravindran Major majorravi@gmail.com
Director Accounts, Ceremonial & Welfare Directorate
Adjutant General's Branch, Army Headquarters, South Block, Room No 279,
DHQ PO New Delhi – 110011
Tele No - 2337 5138
Ravindran Major majorravi@gmail.com
NOTE ON APPOINTMENT OF ARMED FORCESGRIEVANCES REDRESSAL COMMISSION ANDPAYMENT OF RANK PAY TO DEFENCE OFFICERS
1. I.A. No. 9 of 2010 in T.P. (Civil) No. 56/2007, an application for modification/ recalling of final order dated 08.03.2010 and re-hearing of the matter, filed by Union of India came up for hearing today on 15.11.2010. The aforesaid T.P. was filed by the Union of India with a prayer to transfer several writ petitions pending in the various High Courts regarding correct fixation of rank pay as recommended by the IVth Pay Commission and accepted by the Central Government, to be effected from 01.01.1986 in respect of the officers of the Armed Forces and finally decided on 08.03.2010 in favour of the officers.
2. The aforesaid I.A. was listed for hearing before the Bench of Hon’ble Justice Markandey Katju and Hon’ble Justice Gyan Sudha Mishra before Court – 6 as Item No. 4 today i.e. 15.11.2010. Some connected matters were also listed. It may be noted that the Hon’ble Supreme Court has already passed final order in the aforesaid matters on 08.03.2010 and directed the Central Government to pay the rank pay to the affected officers w.e.f. 01.01.1986 along with 6% interest. Surprisingly, instead of implementing the aforesaid directions, UOI had filed an application for modification and recalling of the order dated 08.03.2010 and for re-hearing of the matters. The respondents i.e. writ petitioners in the High Court of Kerala and Ex-servicemen organizations namely Retired Defence Officres Association, Disabled War Veterans of India, Naval Chapter and Purva Sainik Prishad were represented by Advocates, Mr. Mahabir Singh, Gp Capt Karan Singh Bhati (Retd.) and Ms Aishwarya Bhati.
3. In the connected matter, W.P. (Civil) No. 291/2010 – “Pushpawanti Versus Union of India” wherein a pension of rs. 80/- p.m. was being paid to the widow of a highly decorated Major, the Hon’ble Court has been pleased to pass detailed directions for the formation of Commission, headed by Hon’ble Mr. Justice Kuldeep Singh, Retired Judge of the Supreme Court, Hon’ble Mr. Justice S.S. Sodhi, Retired Judge of Allahabad High Court, General V.P. Malik, Former Chief of Army Staff and Lt. General Vijay Oberoi (Retd.) and one member i.e. Civil Servant either serving or retired, to be nominated by the Union of India to look into and make recommendations with regard to the grievances of serving and retired Defence personnel like one rank one pension and other disparities and anomalies, without limiting the scope of reference. The matter will continue to be monitored by the Hon’ble Supreme Court.
4. The Hon’ble Court was very clear on the purpose and backdrop of the need for setting up such a Commission to provide an equitable Forum to look into and make recommendations for a fair redressal of grievances of the Men-In-Uniform, who had been at the receiving end of the Governmental/ Bureaucratic Apathy and indifference for years and decades.
5. The Hon’ble Court was extremely moved with instances of pittance being paid as pension to widows of highly decorated officers who laid down their lives for the Nation and years of indifferent and unfair policies leading to officers and men taking extreme steps of returning their gallantry medals and even burning their artificial limbs which were fixed upon loosing natural limbs in war/ action. The Hon’ble Court had specifically expressed its concern and intention on earlier occasions also when these matters were being heard and had directed the Union of India to file an affidavit on these lines, while expressing that the Commission could be formed by the court suo-moto also, however, the intention was to include the Union of India in the decision making process since such high degree of discontentment which was apparent among the personnel of Defence Forces, is not good for the country.
6. The Union of Indian had filed an additional affidavit in the aforesaid T.P. and connected matters, pursuant to the directions of this Hon’ble Court and the entire tone and tanner of the affidavit was to question the final order dated 08.03.2010 passed by the Hon’ble Supreme Court for grant of rank pay with arrears and 6% interest and acting in disregard to the directions of the Hon’ble Supreme Court passed on 08.03.2010 and to somehow impress upon the court that all the grievances of defence personnel were being looked into by the Government. Interestingly, the Union of India, through the affidavit of under Secretary in the Ministry of Defence, only consented to referring the issue of fixation of rank pay to the proposed Commission and expressed its inability to consent to any other terms of reference.
7. During the hearing of the matter today, the Hon’ble Court termed the affidavit of the Union of India as contemptuous and disregarded the same. It was clear that the Hon’ble Court was disturbed with the attitude of the Government when the court pointed out that no law required consent from the Union of India to pass directions with regard to the setting up a Commission. The Hon’ble Court also refused to refer the issue of rank pay fixation to the Commission since it has already been settled in favour of the officers by the order of the Hon’ble Supreme court itself dated 08.03.2010 in T.P. (Civil) No. 56/2007. The Application for modification and recalling the order dated 08.03.2010 has been referred to the Chief Justice of India for placing the same before another Bench.
Lt Col BK Sharma
President, RDOA
15/11/10, RDOA India
rdoaindia@gmail.com
2. The aforesaid I.A. was listed for hearing before the Bench of Hon’ble Justice Markandey Katju and Hon’ble Justice Gyan Sudha Mishra before Court – 6 as Item No. 4 today i.e. 15.11.2010. Some connected matters were also listed. It may be noted that the Hon’ble Supreme Court has already passed final order in the aforesaid matters on 08.03.2010 and directed the Central Government to pay the rank pay to the affected officers w.e.f. 01.01.1986 along with 6% interest. Surprisingly, instead of implementing the aforesaid directions, UOI had filed an application for modification and recalling of the order dated 08.03.2010 and for re-hearing of the matters. The respondents i.e. writ petitioners in the High Court of Kerala and Ex-servicemen organizations namely Retired Defence Officres Association, Disabled War Veterans of India, Naval Chapter and Purva Sainik Prishad were represented by Advocates, Mr. Mahabir Singh, Gp Capt Karan Singh Bhati (Retd.) and Ms Aishwarya Bhati.
3. In the connected matter, W.P. (Civil) No. 291/2010 – “Pushpawanti Versus Union of India” wherein a pension of rs. 80/- p.m. was being paid to the widow of a highly decorated Major, the Hon’ble Court has been pleased to pass detailed directions for the formation of Commission, headed by Hon’ble Mr. Justice Kuldeep Singh, Retired Judge of the Supreme Court, Hon’ble Mr. Justice S.S. Sodhi, Retired Judge of Allahabad High Court, General V.P. Malik, Former Chief of Army Staff and Lt. General Vijay Oberoi (Retd.) and one member i.e. Civil Servant either serving or retired, to be nominated by the Union of India to look into and make recommendations with regard to the grievances of serving and retired Defence personnel like one rank one pension and other disparities and anomalies, without limiting the scope of reference. The matter will continue to be monitored by the Hon’ble Supreme Court.
4. The Hon’ble Court was very clear on the purpose and backdrop of the need for setting up such a Commission to provide an equitable Forum to look into and make recommendations for a fair redressal of grievances of the Men-In-Uniform, who had been at the receiving end of the Governmental/ Bureaucratic Apathy and indifference for years and decades.
5. The Hon’ble Court was extremely moved with instances of pittance being paid as pension to widows of highly decorated officers who laid down their lives for the Nation and years of indifferent and unfair policies leading to officers and men taking extreme steps of returning their gallantry medals and even burning their artificial limbs which were fixed upon loosing natural limbs in war/ action. The Hon’ble Court had specifically expressed its concern and intention on earlier occasions also when these matters were being heard and had directed the Union of India to file an affidavit on these lines, while expressing that the Commission could be formed by the court suo-moto also, however, the intention was to include the Union of India in the decision making process since such high degree of discontentment which was apparent among the personnel of Defence Forces, is not good for the country.
6. The Union of Indian had filed an additional affidavit in the aforesaid T.P. and connected matters, pursuant to the directions of this Hon’ble Court and the entire tone and tanner of the affidavit was to question the final order dated 08.03.2010 passed by the Hon’ble Supreme Court for grant of rank pay with arrears and 6% interest and acting in disregard to the directions of the Hon’ble Supreme Court passed on 08.03.2010 and to somehow impress upon the court that all the grievances of defence personnel were being looked into by the Government. Interestingly, the Union of India, through the affidavit of under Secretary in the Ministry of Defence, only consented to referring the issue of fixation of rank pay to the proposed Commission and expressed its inability to consent to any other terms of reference.
7. During the hearing of the matter today, the Hon’ble Court termed the affidavit of the Union of India as contemptuous and disregarded the same. It was clear that the Hon’ble Court was disturbed with the attitude of the Government when the court pointed out that no law required consent from the Union of India to pass directions with regard to the setting up a Commission. The Hon’ble Court also refused to refer the issue of rank pay fixation to the Commission since it has already been settled in favour of the officers by the order of the Hon’ble Supreme court itself dated 08.03.2010 in T.P. (Civil) No. 56/2007. The Application for modification and recalling the order dated 08.03.2010 has been referred to the Chief Justice of India for placing the same before another Bench.
Lt Col BK Sharma
President, RDOA
15/11/10, RDOA India
rdoaindia@gmail.com
Oct 21, 2010
RANK PAY OFFICERS
I doubt whether you had alook at the file notings of the Defence
Secretariate file on the issue. Anyway I had a look at it. In case you
have not seen it so far, kindly go through it. If you seek
inspectionof the file under RTI Act, you will get it. Let me point out
following:
1. As per Defence Ministry's note dated 22-12-2009 the financial
implications were estimated t be Rs.433 cores without taking into
account financial implications on pensionary benefits in respect of
army and navy officers.
2. It was referredtoLegal Adviser (Def)
3. The Legal Advisor was of the opinion that review can be done on
following grounds:
(a) Discovery of new facts
(b) Mistake or errorapparenton face of ecord and
(c) Any other sufficient reason
4.It has gone to the solicitor Gemneral
5.The Joint Secretary(L) Anand Misra hadpointed out that "In view of
the huge financialimplications and importance of the case,it is
roposed to get it assessed by a High Power Committee consisting of
Defence Secretary, Secretary, Dept of Expenditure and Secreary
(Defence Finance)
6.The RM has approved consitutionof the above Committee
7. This Committee has worked out the expenditure as - Arrears on
acount of pay and pension to be around Rs.426 crores and Rs.83 crores
respectively. Interest @ 6% per annum on these arrears as ordered by
the SC to be Rs.1.114.71 crores and the total financial liaility comes
to around Rs.1,623.71 crores
8. The case was puersued purely on taking of the above
mentionedone-time financial implecation and enhanced
recuring implication.
9. In nutshell it may be seen that only the financial im0plication was
the criteria for the government to seek the review/recall and not the
merrrit of case
10 Now we should recollect following
(a) The arrears was resulted due to the misinterretation of the 4 PC
orders by the baboos
(b) The mistakes were corrected and the correction has been ratified
by the HC and SC
(c) Now the position is that the above amount is due to officers. ie.,
amount due to the employees of government. It is legally incumbant on
the employer ie., the government to pay this due to its employees.,
(d) Government cannot absolve fromthis liability on a plea that the
amount is too high.
(e) If the government is not capable of discharging its liability, it
has no choice other than declaring itself 'INSOLVANT'. After becoming
insolvant, the employees is entitled to seek their dues by REVENUE
RECOVERY.
I therefore request the concerned to bear in mind the requirement of
the government becoming INSOLVENT to escape the payment and our
entitlement to get our dues by REVENUE RECOVERY. I also request the
concerrned to impress all concerned that the intgerest of Rs.1,114.71
crores cannot be considered as the expenditure as the entitled
interest has always been morethan 6% and more than Rs.1114,71 has
already gained by government by withholding the dues from us. This is
as good as returning our DSOP deposit. This can never be considered
as an additional burden. In fact we should insist payment of interest
at market rate from 8-3-2010
Col NR Kurup (Retd)
colnrkurup@gmail.com
Secretariate file on the issue. Anyway I had a look at it. In case you
have not seen it so far, kindly go through it. If you seek
inspectionof the file under RTI Act, you will get it. Let me point out
following:
1. As per Defence Ministry's note dated 22-12-2009 the financial
implications were estimated t be Rs.433 cores without taking into
account financial implications on pensionary benefits in respect of
army and navy officers.
2. It was referredtoLegal Adviser (Def)
3. The Legal Advisor was of the opinion that review can be done on
following grounds:
(a) Discovery of new facts
(b) Mistake or errorapparenton face of ecord and
(c) Any other sufficient reason
4.It has gone to the solicitor Gemneral
5.The Joint Secretary(L) Anand Misra hadpointed out that "In view of
the huge financialimplications and importance of the case,it is
roposed to get it assessed by a High Power Committee consisting of
Defence Secretary, Secretary, Dept of Expenditure and Secreary
(Defence Finance)
6.The RM has approved consitutionof the above Committee
7. This Committee has worked out the expenditure as - Arrears on
acount of pay and pension to be around Rs.426 crores and Rs.83 crores
respectively. Interest @ 6% per annum on these arrears as ordered by
the SC to be Rs.1.114.71 crores and the total financial liaility comes
to around Rs.1,623.71 crores
8. The case was puersued purely on taking of the above
mentionedone-time financial implecation and enhanced
recuring implication.
9. In nutshell it may be seen that only the financial im0plication was
the criteria for the government to seek the review/recall and not the
merrrit of case
10 Now we should recollect following
(a) The arrears was resulted due to the misinterretation of the 4 PC
orders by the baboos
(b) The mistakes were corrected and the correction has been ratified
by the HC and SC
(c) Now the position is that the above amount is due to officers. ie.,
amount due to the employees of government. It is legally incumbant on
the employer ie., the government to pay this due to its employees.,
(d) Government cannot absolve fromthis liability on a plea that the
amount is too high.
(e) If the government is not capable of discharging its liability, it
has no choice other than declaring itself 'INSOLVANT'. After becoming
insolvant, the employees is entitled to seek their dues by REVENUE
RECOVERY.
I therefore request the concerned to bear in mind the requirement of
the government becoming INSOLVENT to escape the payment and our
entitlement to get our dues by REVENUE RECOVERY. I also request the
concerrned to impress all concerned that the intgerest of Rs.1,114.71
crores cannot be considered as the expenditure as the entitled
interest has always been morethan 6% and more than Rs.1114,71 has
already gained by government by withholding the dues from us. This is
as good as returning our DSOP deposit. This can never be considered
as an additional burden. In fact we should insist payment of interest
at market rate from 8-3-2010
Col NR Kurup (Retd)
colnrkurup@gmail.com
Oct 3, 2010
TOLL TAX EXEMPTION
Thursday, September 23, 2010
This issue keeps cropping up every year or so.
Some officers are again circulating a letter purportedly issued by the NHAI in which it has been stated that retired defence personnel are entitled to toll exemption.
The above mentioned letter is fake. Please do not embarrass yourself or the service by using it or fighting with toll barrier staff on its basis. This has been clarified by me time and again.
An excerpt of a news report wherein the subject was dealt with by the Supreme Court is also floating around. The said judgement was related to the private vehicles of serving personnel only and had no relevance to retired personnel. The Supreme Court had upheld toll exemption to the private vehicles of serving defence personnel only.
Anyone who may want to know about the issue in greater detail may go through previous posts on the subject by clicking here.
Posted by Navdeep / Maj Navdeep Singh at 8:00 AM Labels: Policy and Benefits, toll tax
This issue keeps cropping up every year or so.
Some officers are again circulating a letter purportedly issued by the NHAI in which it has been stated that retired defence personnel are entitled to toll exemption.
The above mentioned letter is fake. Please do not embarrass yourself or the service by using it or fighting with toll barrier staff on its basis. This has been clarified by me time and again.
An excerpt of a news report wherein the subject was dealt with by the Supreme Court is also floating around. The said judgement was related to the private vehicles of serving personnel only and had no relevance to retired personnel. The Supreme Court had upheld toll exemption to the private vehicles of serving defence personnel only.
Anyone who may want to know about the issue in greater detail may go through previous posts on the subject by clicking here.
Posted by Navdeep / Maj Navdeep Singh at 8:00 AM Labels: Policy and Benefits, toll tax
Sep 17, 2010
GOVT GIVES A BOOST TO LONG TERM INVESTMENTS
The proposed Direct Taxes Code (DTC) tabled in Parliament on Monday signals some key changes for you. Women taxpayers would enter a new taxing era, where they won’t get the exemption edge that they have been enjoying till now. While the overall deductions have moved up only marginally by `15,000, some instruments have been moved out from the deduction ambit.
“I feel this is a diluted version of the first draft. In terms of tax exemption limit and deductions, the difference is not huge,” says Nikhil Bhatia, executive director (direct tax), PricewaterhouseCooper.
The income-tax exemption limit for both men and women has been moved up to `2 lakh. While for men this is a jump of `40,000 from their existing limit of `1.6 lakh, women’s benefit has been restricted only to `10,000 from their current `1.9 lakh limit. Senior citizens, too, would see a rise of only `10,000—the new exemption limit has been raised to `2.5 lakh from the current `2.4 lakh.
Exemption means the income threshold before which no income-tax is due. So, a man earning `3 lakh a year will have to pay tax only on `1 lakh; `2 lakh becomes his tax-free income or income exempted from tax. Add a deduction of `1 lakh and he can bring his tax liability to nil. Also, any individual claiming a deduction of `1.5 lakh can ensure that `3.5 lakh of his income is tax-free.
Deductions up to `1 lakh will be available on savings, pension funds and pension schemes. These include long-term savings options, such as the Employees’ Provident Fund, Public Provident Fund, other government approved provident funds and contributions made to the tier I structure of the New Pension System.
Another `50,000 will be available on life insurance and health insurance premiums and tuition fees. Additionally, the interest on loans taken for higher education is also deductible. However, premiums paid on a life insurance policy can’t exceed 5% of the sum assured.
Earlier, the total deduction came to `1,35,000, including instruments under section 80C up to `1 lakh, infrastructure bonds up to `20,000 and health insurance up to `15,000. Now, it comes to `1.5 lakh.
Home loan principal: The deduction up to `1.5 lakh on interest paid on home loans continues. However, the principal on home loans is not eligible for deduction any more.
Equity-linked savings scheme (ELSS): In a blow to the mutual fund industry, the tax-friendly ELSS is out of the deduction ambit.
Others: Five-year fixed deposits (FDs), which were earlier included in `1 lakh deduction list, are out. Infrastructure bonds, introduced in this year’s Budget for an additional deduction of `20,000, seem to have a short life. They, too, are not part of the new list.
“The deduction of up to `1 lakh under DTC is applicable on approved funds that currently consist of provident funds, pension and superannuation schemes. It seems to suggest that ELSS and infrastructure bonds will no longer enjoy tax deduction,” says Bhatia.
The proposed DTC brings cheer to those who have made capital gains. The previous version of the DTC proposed to tax a portion of long-term capital gains (LTCG), the current proposal has removed it altogether. For listed securities, LTCG will be nil as is the norm now.
In case of short-term capital gains (STCG), gains made within a year, 50% of the profit will be taxed at your tax slab. Effectively, that would mean a tax rate of 5%, 10% and 15% for those in tax slabs of 10%, 20% and 30%, respectively. At present, STCG is taxed at 15%, which is levied on the entire amount.
This means that those in lower tax bracket would gain out of this move. Says Sudhir Kapadia, tax market leader, Ernst and Young, a consulting firm: “Investors in the lower tax bracket will stand to gain as they will pay less than the current 15%.”
The rich will have to pay a wealth tax if the proposed DTC is passed in its present form. Net assets in excess of `1 crore will be taxed every year at the rate of 1%. Net assets is the difference between the value of all assets owned by a person (including a house, land, car, yacht, helicopter, jewellery, furniture, utensils, archaeological collections, paintings, cash and deposits in banks outside India, among others) and debts associated with the above assets.
The tax will have to be paid by the date for filing of tax returns. There are a plenty of exclusions in this DTC clause, so do talk to your financial planner before you panic.
The restructuring of deductions is aimed at encouraging long-term savings. By increasing the deduction limit for pension products, the government clearly aims at boosting retirement savings. Also, removal of short-term tax-saving tools, such as ELSS and five-year FDs, shows that the new focus period is long term.
Also, with deductions on insurance premiums limited to `50,000, sticking to the simplest and cheapest term insurance would make more sense for you. Earlier, agents often pushed insurance products as a tax-saving tool; they can’t use that pretext any more.
Deepti Bhaskaran, deepti.bh@livemint.com
“I feel this is a diluted version of the first draft. In terms of tax exemption limit and deductions, the difference is not huge,” says Nikhil Bhatia, executive director (direct tax), PricewaterhouseCooper.
The income-tax exemption limit for both men and women has been moved up to `2 lakh. While for men this is a jump of `40,000 from their existing limit of `1.6 lakh, women’s benefit has been restricted only to `10,000 from their current `1.9 lakh limit. Senior citizens, too, would see a rise of only `10,000—the new exemption limit has been raised to `2.5 lakh from the current `2.4 lakh.
Exemption means the income threshold before which no income-tax is due. So, a man earning `3 lakh a year will have to pay tax only on `1 lakh; `2 lakh becomes his tax-free income or income exempted from tax. Add a deduction of `1 lakh and he can bring his tax liability to nil. Also, any individual claiming a deduction of `1.5 lakh can ensure that `3.5 lakh of his income is tax-free.
Deductions up to `1 lakh will be available on savings, pension funds and pension schemes. These include long-term savings options, such as the Employees’ Provident Fund, Public Provident Fund, other government approved provident funds and contributions made to the tier I structure of the New Pension System.
Another `50,000 will be available on life insurance and health insurance premiums and tuition fees. Additionally, the interest on loans taken for higher education is also deductible. However, premiums paid on a life insurance policy can’t exceed 5% of the sum assured.
Earlier, the total deduction came to `1,35,000, including instruments under section 80C up to `1 lakh, infrastructure bonds up to `20,000 and health insurance up to `15,000. Now, it comes to `1.5 lakh.
Home loan principal: The deduction up to `1.5 lakh on interest paid on home loans continues. However, the principal on home loans is not eligible for deduction any more.
Equity-linked savings scheme (ELSS): In a blow to the mutual fund industry, the tax-friendly ELSS is out of the deduction ambit.
Others: Five-year fixed deposits (FDs), which were earlier included in `1 lakh deduction list, are out. Infrastructure bonds, introduced in this year’s Budget for an additional deduction of `20,000, seem to have a short life. They, too, are not part of the new list.
“The deduction of up to `1 lakh under DTC is applicable on approved funds that currently consist of provident funds, pension and superannuation schemes. It seems to suggest that ELSS and infrastructure bonds will no longer enjoy tax deduction,” says Bhatia.
The proposed DTC brings cheer to those who have made capital gains. The previous version of the DTC proposed to tax a portion of long-term capital gains (LTCG), the current proposal has removed it altogether. For listed securities, LTCG will be nil as is the norm now.
In case of short-term capital gains (STCG), gains made within a year, 50% of the profit will be taxed at your tax slab. Effectively, that would mean a tax rate of 5%, 10% and 15% for those in tax slabs of 10%, 20% and 30%, respectively. At present, STCG is taxed at 15%, which is levied on the entire amount.
This means that those in lower tax bracket would gain out of this move. Says Sudhir Kapadia, tax market leader, Ernst and Young, a consulting firm: “Investors in the lower tax bracket will stand to gain as they will pay less than the current 15%.”
The rich will have to pay a wealth tax if the proposed DTC is passed in its present form. Net assets in excess of `1 crore will be taxed every year at the rate of 1%. Net assets is the difference between the value of all assets owned by a person (including a house, land, car, yacht, helicopter, jewellery, furniture, utensils, archaeological collections, paintings, cash and deposits in banks outside India, among others) and debts associated with the above assets.
The tax will have to be paid by the date for filing of tax returns. There are a plenty of exclusions in this DTC clause, so do talk to your financial planner before you panic.
The restructuring of deductions is aimed at encouraging long-term savings. By increasing the deduction limit for pension products, the government clearly aims at boosting retirement savings. Also, removal of short-term tax-saving tools, such as ELSS and five-year FDs, shows that the new focus period is long term.
Also, with deductions on insurance premiums limited to `50,000, sticking to the simplest and cheapest term insurance would make more sense for you. Earlier, agents often pushed insurance products as a tax-saving tool; they can’t use that pretext any more.
Deepti Bhaskaran, deepti.bh@livemint.com
A VERY DAMNING ARTICLE ON INDIA & TRUE TOO
Reflections on India By Sean Paul Kelley
Sean Paul Kelley is a travel writer, former radio host, and before that an asset manager for a Wall Street investment bank that is still (barely) alive. He recently left a fantastic job in Singapore working for Solar Winds, a software company based out of Austin to travel around the world for a year (or two). He founded The Agonist, in 2002, which is still considered the top international affairs, culture and news destination for progressives. He is also the Global Correspondent for The Young Turks, on satellite radio and Air America .
If you are Indian, or of Indian descent, I must preface this post with a clear warning: you are not going to like what I have to say. My criticisms may be very hard to stomach. But consider them as the hard words and loving advice of a good friend. Someone who’s being honest with you and wants nothing from you.
These criticisms apply to all of India except Kerala and the places I didn’t visit, except that I have a feeling it applies to all of India , except as I mentioned before, Kerala.
Lastly, before anyone accuses me of Western Cultural Imperialism, let me say this: if this is what India and Indians want, then hey, who am I to tell them differently. Take what you like and leave the rest. In the end it doesn’t really matter, as I get the sense that Indians, at least many upper class Indians, don’t seem to care and the lower classes just don’t know any better, what with Indian culture being so intense and pervasive on the sub-continent. But here goes, nonetheless.
India is a mess. It’s that simple, but it’s also quite complicated. I’ll start with what I think are India ’s four major problems–the four most preventing India from becoming a developing nation–and then move to some of the ancillary ones.
First, pollution. In my opinion the filth, squalor and all around pollution indicates a marked lack of respect for India by Indians. I don’t know how cultural the filth is, but it’s really beyond anything I have ever encountered. At times the smells, trash, refuse and excrement are like a garbage dump.
Right next door to the Taj Mahal was a pile of trash that smelled so bad, was so foul as to almost ruin the entire Taj experience. Delhi , Bangalore and Chennai to a lesser degree were so very polluted as to make me physically ill. Sinus infections, ear infection, bowels churning was an all to common experience in India . Dung, be it goat, cow or human fecal matter was common on the streets. In major tourist areas filth was everywhere, littering the sidewalks, the roadways, you name it. Toilets in the middle of the road, men urinating and defecating anywhere, in broad daylight.
Whole villages are plastic bag wastelands. Roadsides are choked by it. Air quality that can hardly be called quality. Far too much coal and far to few unleaded vehicles on the road. The measure should be how dangerous the air is for one’s health, not how good it is. People casually throw trash in the streets, on the roads.
The only two cities that could be considered sanitary in my journey were Trivandrum –the capital of Kerala–and Calicut . I don’t know why this is. But I can assure you that at some point this pollution will cut into India ’s productivity, if it already hasn’t. The pollution will hobble India ’s growth path, if that indeed is what the country wants. (Which I personally doubt, as India is far too conservative a country, in the small ‘c’ sense.)
The second is sue , infrastructure, can be divided into four subcategories: roads, rails and ports and the electrical grid. The electrical grid is a joke. Load shedding is all too common, everywhere in India . Wide swaths of the country spend much of the day without the electricity they actually pay for. With out regular electricity, productivity, again, falls.
The ports are a joke. Antiquated, out of date, hardly even appropriate for the mechanized world of container ports, more in line with the days of longshoremen and the like. Roads are an equal disaster. I only saw one elevated highway that would be considered decent in Thailand , much less Western Europe or America . And I covered fully two thirds of the country during my visit.
There are so few dual carriage way roads as to be laughable. There are no traffic laws to speak of, and if there are, they are rarely obeyed, much less enforced. A drive that should take an hour takes three. A drive that should take three takes nine. The buses are at least thirty years old, if not older.
Everyone in India , or who travels in India raves about the railway system. Rubbish. It’s awful. Now, when I was there in 2003 and then late 2004 it was decent. But in the last five years the traffic on the rails has grown so quickly that once again, it is threatening productivity. Waiting in line just to ask a question now takes thirty minutes. Routes are routinely sold out three and four days in advance now, leaving travelers stranded with little option except to take the decrepit and dangerous buses.
At least fifty million people use the trains a day in India . 50 million people! Not surprising that waitlists of 500 or more people are common now.
The rails are affordable and comprehensive but they are overcrowded and what with budget airlines popping up in India like Sadhus in an ashram the middle and lowers classes are left to deal with the overutilized rails and quality suffers. No one seems to give a shit.
Seriously, I just never have the impression that the Indian government really cares. Too interested in buying weapons from Russia , Israel and the US I guess.
The last major problem in India is an old problem and can be divided into two parts that’ve been two sides of the same coin since government was invented: bureaucracy and corruption.
It take triplicates to register into a hotel. To get a SIM card for one’s phone is like wading into a jungle of red-tape and photocopies one is not likely to emerge from in a good mood, much less satisfied with customer service.
Getting train tickets is a terrible ordeal, first you have to find the train number, which takes 30 minutes, then you have to fill in the form, which is far from easy, then you have to wait in line to try and make a reservation, which takes 30 minutes at least and if you made a single mistake on the form back you go to the end of the queue, or what passes for a queue in India.
The government is notoriously uninterested in the problems of the commoners, too busy fleecing the rich, or trying to get rich themselves in some way shape or form. Take the trash for example, civil rubbish collection authorities are too busy taking kickbacks from the wealthy to keep their areas clean that they don’t have the time, manpower, money or interest in doing their job.
Rural hospitals are perennially understaffed as doctors pocket the fees the government pays them, never show up at the rural hospitals and practice in the cities instead.
I could go on for quite some time about my perception of India and its problems, but in all seriousness, I don’t think anyone in India really cares. And that, to me, is the biggest problem. India is too conservative a society to want to change in any way.
Mumbai, India ’s financial capital is about as filthy, polluted and poor as the worst city imaginable in Vietnam , or Indonesia –and being more polluted than Medan , in Sumatra is no easy task. The biggest rats I have ever seen were in Medan !
One would expect a certain amount of, yes, I am going to use this word, backwardness, in a country that hasn’t produced so many Nobel Laureates, nuclear physicists, imminent economists and entrepreneurs. But India has all these things and what have they brought back to India with them? Nothing.
The rich still have their servants, the lower castes are still there to do the dirty work and so the country remains in stasis. It’s a shame. Indians and India have many wonderful things to offer the world, but I’m far from sanguine that India will amount to much in my lifetime.
Now, have at it, call me a cultural imperialist, a spoiled child of the West and all that. But remember, I’ve been there. I’ve done it. And I’ve seen 50 other countries on this planet and none, not even Ethiopia , have as long and gargantuan a laundry list of problems as India does.
And the bottom line is, I don’t think India really cares. Too complacent and too conservative.
From: Brig K P G Kurup
Date: Sunday, 12 September, 2010, 10:52 AM
Sean Paul Kelley is a travel writer, former radio host, and before that an asset manager for a Wall Street investment bank that is still (barely) alive. He recently left a fantastic job in Singapore working for Solar Winds, a software company based out of Austin to travel around the world for a year (or two). He founded The Agonist, in 2002, which is still considered the top international affairs, culture and news destination for progressives. He is also the Global Correspondent for The Young Turks, on satellite radio and Air America .
If you are Indian, or of Indian descent, I must preface this post with a clear warning: you are not going to like what I have to say. My criticisms may be very hard to stomach. But consider them as the hard words and loving advice of a good friend. Someone who’s being honest with you and wants nothing from you.
These criticisms apply to all of India except Kerala and the places I didn’t visit, except that I have a feeling it applies to all of India , except as I mentioned before, Kerala.
Lastly, before anyone accuses me of Western Cultural Imperialism, let me say this: if this is what India and Indians want, then hey, who am I to tell them differently. Take what you like and leave the rest. In the end it doesn’t really matter, as I get the sense that Indians, at least many upper class Indians, don’t seem to care and the lower classes just don’t know any better, what with Indian culture being so intense and pervasive on the sub-continent. But here goes, nonetheless.
India is a mess. It’s that simple, but it’s also quite complicated. I’ll start with what I think are India ’s four major problems–the four most preventing India from becoming a developing nation–and then move to some of the ancillary ones.
First, pollution. In my opinion the filth, squalor and all around pollution indicates a marked lack of respect for India by Indians. I don’t know how cultural the filth is, but it’s really beyond anything I have ever encountered. At times the smells, trash, refuse and excrement are like a garbage dump.
Right next door to the Taj Mahal was a pile of trash that smelled so bad, was so foul as to almost ruin the entire Taj experience. Delhi , Bangalore and Chennai to a lesser degree were so very polluted as to make me physically ill. Sinus infections, ear infection, bowels churning was an all to common experience in India . Dung, be it goat, cow or human fecal matter was common on the streets. In major tourist areas filth was everywhere, littering the sidewalks, the roadways, you name it. Toilets in the middle of the road, men urinating and defecating anywhere, in broad daylight.
Whole villages are plastic bag wastelands. Roadsides are choked by it. Air quality that can hardly be called quality. Far too much coal and far to few unleaded vehicles on the road. The measure should be how dangerous the air is for one’s health, not how good it is. People casually throw trash in the streets, on the roads.
The only two cities that could be considered sanitary in my journey were Trivandrum –the capital of Kerala–and Calicut . I don’t know why this is. But I can assure you that at some point this pollution will cut into India ’s productivity, if it already hasn’t. The pollution will hobble India ’s growth path, if that indeed is what the country wants. (Which I personally doubt, as India is far too conservative a country, in the small ‘c’ sense.)
The second is sue , infrastructure, can be divided into four subcategories: roads, rails and ports and the electrical grid. The electrical grid is a joke. Load shedding is all too common, everywhere in India . Wide swaths of the country spend much of the day without the electricity they actually pay for. With out regular electricity, productivity, again, falls.
The ports are a joke. Antiquated, out of date, hardly even appropriate for the mechanized world of container ports, more in line with the days of longshoremen and the like. Roads are an equal disaster. I only saw one elevated highway that would be considered decent in Thailand , much less Western Europe or America . And I covered fully two thirds of the country during my visit.
There are so few dual carriage way roads as to be laughable. There are no traffic laws to speak of, and if there are, they are rarely obeyed, much less enforced. A drive that should take an hour takes three. A drive that should take three takes nine. The buses are at least thirty years old, if not older.
Everyone in India , or who travels in India raves about the railway system. Rubbish. It’s awful. Now, when I was there in 2003 and then late 2004 it was decent. But in the last five years the traffic on the rails has grown so quickly that once again, it is threatening productivity. Waiting in line just to ask a question now takes thirty minutes. Routes are routinely sold out three and four days in advance now, leaving travelers stranded with little option except to take the decrepit and dangerous buses.
At least fifty million people use the trains a day in India . 50 million people! Not surprising that waitlists of 500 or more people are common now.
The rails are affordable and comprehensive but they are overcrowded and what with budget airlines popping up in India like Sadhus in an ashram the middle and lowers classes are left to deal with the overutilized rails and quality suffers. No one seems to give a shit.
Seriously, I just never have the impression that the Indian government really cares. Too interested in buying weapons from Russia , Israel and the US I guess.
The last major problem in India is an old problem and can be divided into two parts that’ve been two sides of the same coin since government was invented: bureaucracy and corruption.
It take triplicates to register into a hotel. To get a SIM card for one’s phone is like wading into a jungle of red-tape and photocopies one is not likely to emerge from in a good mood, much less satisfied with customer service.
Getting train tickets is a terrible ordeal, first you have to find the train number, which takes 30 minutes, then you have to fill in the form, which is far from easy, then you have to wait in line to try and make a reservation, which takes 30 minutes at least and if you made a single mistake on the form back you go to the end of the queue, or what passes for a queue in India.
The government is notoriously uninterested in the problems of the commoners, too busy fleecing the rich, or trying to get rich themselves in some way shape or form. Take the trash for example, civil rubbish collection authorities are too busy taking kickbacks from the wealthy to keep their areas clean that they don’t have the time, manpower, money or interest in doing their job.
Rural hospitals are perennially understaffed as doctors pocket the fees the government pays them, never show up at the rural hospitals and practice in the cities instead.
I could go on for quite some time about my perception of India and its problems, but in all seriousness, I don’t think anyone in India really cares. And that, to me, is the biggest problem. India is too conservative a society to want to change in any way.
Mumbai, India ’s financial capital is about as filthy, polluted and poor as the worst city imaginable in Vietnam , or Indonesia –and being more polluted than Medan , in Sumatra is no easy task. The biggest rats I have ever seen were in Medan !
One would expect a certain amount of, yes, I am going to use this word, backwardness, in a country that hasn’t produced so many Nobel Laureates, nuclear physicists, imminent economists and entrepreneurs. But India has all these things and what have they brought back to India with them? Nothing.
The rich still have their servants, the lower castes are still there to do the dirty work and so the country remains in stasis. It’s a shame. Indians and India have many wonderful things to offer the world, but I’m far from sanguine that India will amount to much in my lifetime.
Now, have at it, call me a cultural imperialist, a spoiled child of the West and all that. But remember, I’ve been there. I’ve done it. And I’ve seen 50 other countries on this planet and none, not even Ethiopia , have as long and gargantuan a laundry list of problems as India does.
And the bottom line is, I don’t think India really cares. Too complacent and too conservative.
From: Brig K P G Kurup
Date: Sunday, 12 September, 2010, 10:52 AM
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