NPS is far beneficial than Government Pension – Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension

NPS is far beneficial than Government Pension – Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension

The Central Government employees who have joined after 1/1/2004 and are put under National Pension Scheme (NPS)  have been demanding abolition of NPS and have been persuading the Central Government to make the government pension scheme applicable to them.

This only exhibits their ignorance of the fact that the New Pension Scheme is highly lucrative and make the government employees who joined after 1/1/2004 far richer than the government employees who enjoy government pension scheme.  By doing so they are in the process of ruining the great fortunes that lies in store under New Pension Scheme. Let me compare both the scheme:

Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension

Benefits under NPS

Let me take a case of Upper Division Clerk(UDC) who joins government service in 2014 at the age of 25  and renders 35 years  of service till attaining 60 years of age. He / She gets 3% annual increment every year and gets one promotion every 10 year under M.A.C.P.  Although he / she is likely to get 14 to 20% increase in D.A every year as per Consumer Price Index I just take 12%(assuming 6 + 6%) 2 times D.A in a year

YEAR	D.A.assumed  @ 12% Per annum	PAY + GRADE PAY with 3% annual increment	D.A	TOTAL	Total Monthly Subscription (employeeand Govt)	Annual Subscription	Annual Appreciation ofInvestments @ 8.7% Only	TOTAL PENSION WEALTH
2014	107%	9910	10604	20514	4102	49224	2320	51,544
2015	119%	10210	12150	22360	4471	53652	7012	1,12,208
2016	131%	10520	13781	24301	4860	58320	12511	183039
2017	143%	10840	15501	26341	5268	63216	18903	265158
2018	155%	11170	17314	28484	5696	68352	26290	359800
2019	167%	11510	19222	30732	6146	73752	34779	468331
2020	179%	11860	21229	33089	6618	79416	44487	592234
2021	191%	12220	23340	35560	7112	85344	55546	733124
2022	203%	12590	25558	38148	7630	91560	68097	892781
2023	215%	12970	27886	40856	8172	98064	82293	1073138
2024*	227%	14130	32075	46205	9240	110880	98589	1282607
2025	239%	14560	34798	49358	9872	118464	117170	1518241
2026	251%	15000	37650	52650	10530	126360	138041	1782642
2027	263%	15450	40634	56084	11216	134592	161433	2078667
2028	275%	15920	43780	59700	11940	143280	187596	2409543
2029	287%	16400	47068	63468	12694	152328	216809	2778680
2030	299%	16900	50531	67431	13486	161832	249371	3189883
2031	311%	17410	54145	71555	14312	171744	285614	3647241
2032	323%	17940	57946	75886	15178	182136	325893	4155270
2033	335%	18480	61908	80388	16078	192936	370601	4718807
2034*	347%	21060	73078	94138	18828	225936	421184	5365927
2035	359%	21700	77903	99603	19920	239040	478101	6083068
2036	371%	22360	82956	105316	21064	252768	541139	6876975
2037	383%	23030	88205	111235	22248	266976	610878	7754829
2038	395%	23730	93734	117464	23492	281904	687954	8724687
2039	407%	24450	99512	123962	24792	297504	773068	9795259
2040	419%	25190	105546	130736	26148	313776	866975	10976010
2041	431%	25950	111845	137795	27560	330720	970498	12277228
2042	443%	26730	118414	145144	29028	348336	1084535	13710099
2043	455%	27540	125307	152847	30570	366840	1210066	15287005
2044*	467%	29640	138419	168059	33612	403344	1348977	17039326
2045	479%	30530	146239	176769	35354	424248	1501283	18940857
2046	491%	31450	154420	185870	37174	446088	1668876	21055821
2047	503%	32400	162972	195372	39074	468888	1853953	23378662
2048	515%	33380	171907	205287	41058	492696	2057162	25928520
2049	527%	34390	181235	215625	43126	517512	2280169	28726201

* MACP / Promotion Years

(A) Therefore, the total pension wealth of a government servant who joined in 2014 and retiring under New Pension Scheme shall at the time of his retirement be Rs. 2,87,26,201/-

(B) 60% of the lump-sum pension wealth which he / she will be  getting on retirement:
Rs.1,72,35.720

(C) 40%   invested in an annuity scheme  which he / she can receive before 70 years:
Rs.1,14,90,481

(D) Earned Leave Encashment:  Rs. 215625 x 10 months        :  Rs.   21,56,250

TOTAL of (A) (B) (C) and (D) will be            Rs. 3,08,82,451

Death Gratuity:

Although not entitled for retirement gratuity, but eligible for Death Gratuity  If died during the service

Monthly Pension:

At the assumed Interest at the rate of 8.7% per annum on  the other 40%  of pension wealth of Rs.1,14,90,481  invested in annuity shall fetch
monthly pension of  at least  :            Rs.83,306/ –

Not only this, before he / she attains the age of 70 he / she can withdraw the remaining  40% of his pension wealth of Rs. 1,14,90,481/- which if invested in Fixed Deposit of a nationalised bank can fetch interest and take care of not only of his wife and children but his descendants also for generations to come.

This is just a tip of the iceberg. If we consider the other  4 pay commission benefits that materialize on 1/1/2016, 1/1/2026, 1/1/2036 and 1/1/2046 which a NPS pensioner who joins as UDC shall be getting  before his retirement in 2049,his total pension wealth will be undoubtedly double the above amount which comes to more than Rs.5 crores. While a person who joins as U.D.C.gets this much, one will be rocked out of stupor to know what a Group A officer who renders 35 years of service may get – undoubtedly his total pension wealth will be more than Rs.10 crores.

Benefits under Central Government Pension Scheme

Now let us see what will be the retirement benefits of the above person if he / she is put in government pension scheme:

1.Gratuity for 16.5 months :

Rs.2,15,625 x 16.5 months = Rs.35,57,812/- Restricted to  Rs.10,00,000

2. Earned Leave Encashment:

Rs. 215625 x 10 months :     Rs.21,56,250

3. Pension Commutation:

Rs.17195 x 40% = Rs.6878 x 12 x  8.194 years   Rs  6,76,300

Total Benefits under Central Government Pension Scheme:         Rs.38,32,550

4. GPF Balance:

As it is a general tendency of the government servants to withdraw from GPF frequently, there will be very little left at the time of retirement

5. Monthly pension

i) Rs.34390 / 2    =  Rs.17195 (basic pension being 50% of pay and grade pay Less 40% of basic pension towards commutation (Rs 6878) which will be restored after 15 years

Balance basic pension       is Rs. 10317

ii) DA @ 527% of basic pension of Rs.17195  = Rs. 90617 (subject to increase in DA every 6 months based on consumer price index)

Total pension                        is Rs.1,00,934 per month.

After the death of government servant  say after 67 years, spouse can take only 60% of the basic pension i.e.Rs.17195 x 60% = Rs.10317 plus D.A.at the prevailing rates. After spouse’s death children are unlikely to draw the pension as they would have already crossed the age limit.  Thus, unlike the dependents of NPS pensioners, there will be nothing left for financial security  of the dependents of the government pensioners .

Thus it is unwise on the part of government servants who have joined after 1/1/2004 to demand for abolition of NPS scheme and grant of government pension.

Mr.M.Dorai
Deputy Director
ESIC Model Hospital,
Bangalore (Ministry of Labour, Government of India) is the author of this Article.

The views expressed in this article are those of the guest author and are not intended to represent the views of GConnect

PM launches " Jeevan Pramaan " – Digital Life Certificate for Pensioners

Huge relief for senior citizens who have to produce Life Certificates each year to continue receiving pension

The Prime Minister, Shri Narendra Modi, today launched “Jeevan Pramaan” – an “Aadhar-based Digital Life Certificate” for pensioners, in a move that could eventually benefit over a crore pensioners. The Prime Minister said that after the push towards self-certification, this digital life certificate was another enabling mechanism which would benefit the common man.

The proposed digital certification will do away with the requirement of a pensioner having to submit a physical Life Certificate in November each year, in order to ensure continuity of pension being credited into his account. The Department of Electronics and IT has developed a software application which will enable the recording of the pensioner`s Aadhar number and biometric details from his mobile device or computer, by plugging in a biometric reading device. Key details of the pensioner, including date, time, and biometric information will be uploaded to a central database on real-time basis, ultimately enabling the Pension Disbursing Agency to access a Digital Life Certificate. This will conclusively establish that the pensioner was alive at the time of authentication.

The earlier requirement entailed that a pensioner either personally presents himself before the Pension Disbursing Agency, or submits a Life Certificate issued by authorities specified by the Central Pension Accounting Office (CPAO).

At present, 50 lakh individuals draw pension from the Central Government alone. A similar number draw pension from State and Union Territory Governments. Several PSUs also provide pension benefits. Over 25 lakh retired personnel draw pension from the Armed Forces. The Aadhar-Based Digital Life Certificate will go a long way in reducing hardship which so many senior citizens have to go through to produce a Life Certificate every year.

The software application system will be made available to pensioners and other stakeholders on a large scale at no extra cost. It can be operated on a personal computer or a smartphone, along with an inexpensive biometric reading device. This facility will also be made available at Common Service Centres being operated under the National e-Governance Plan, for the benefit of pensioners residing in remote and inaccessible areas

TeamViewer 10.0 Beta

TeamViewer 10.0 Beta

Written By Admin on November 6, 2014 | Thursday, November 06, 2014

TeamViewer is the fast, simple and friendly solution for remote access over the Internet - all applications in one single, very affordable module.

Remote control of computers over the Internet, Instantly take control over a computer anywhere on the Internet, even through firewalls. No installation required, just use it fast and secure. Training, sales and teamwork, TeamViewer can also be used to present your desktop to a partner on the Internet. Show and share your software, PowerPoint presentations etc. File transfer, chat and more, Share your files, chat, switch the direction during a teamwork session, and a lot more is included in TeamViewer.

What's new in this version:

• TeamViewer 10 includes significant performance optimizations. CPU usage optimizations for multi-core processors, HD voice transmission quality, and faster login and load times for the Management Console are just a few examples.
• Apply setting policies, distribute them, and enforce them if necessary, all via the Management Console. Any changes to setting policies are automatically applied to all installations. IT Admins will be happy to know that importing .reg files is now a thing of the past.
• Permit access to all your devices using just one whitelist. No longer worry about having to grant users access via the whitelist on each specific device. Also reduce administrative work now by adding companies to the whitelist instead of having to manage access rights for individual users.
• Refer back to a previous discussion to find information or help resolve an issue. TeamViewer 10 provides a complete chat history for all conversations, and chats are end-to-end encrypted. Create persistent chat groups for ongoing discussions as well.
• Reach out to your colleagues using video and VoIP in exceptional quality for both image and audio without having to first start a meeting. See and talk to multiple participants simultaneously in a single call, and share your screen at any time. As always, security is paramount to TeamViewer, so video calls are end-to-end encrypted just as regular screen sharing meetings are.
• Put a face to your name and a personal touch to your online presence. Your profile picture is displayed in the Computers & Contacts list, chat window, request dialogs, and similar locations where it helps to identify you and add to your professional image.
• Quickly find the right person or device with whom or which to share your screen or files. TeamViewer 10 now automatically displays nearby computers and contacts.
• Ultra high definition monitors, also known as 4K displays, are becoming increasingly popular because of their incredible image fidelity. By means of intelligent scaling, TeamViewer 10 provides flawless connections to 4K displays for both remote control and meeting sessions.
• Customizations are now applied to the download site for the custom modules as well as the waiting room for meetings and service cases. This gives your corporate identity a more prominent presence.
• Maintain a protocol during a remote control session, or note something when it comes to mind. There is no need to wait until the end of a session to write comments.
• Modern software should look the part. TeamViewer 10 boasts a streamlined design and convenient new shortcuts to commonly used features and options. TeamViewer’s already intuitive interface is now even easier to use.
• Integrate your computers and contacts into any software by taking advantage of the Computers & Contacts API. See, for example, when your customers are online, and establish a connection to them from within your software. Synchronize information, and easily access, manage, and edit your computers and contacts.
• With user-definable session timeout limits, supporters and their clients never have to worry about idle sessions remaining open.
• Set up spontaneous support in addition to unattended access. Users can request spontaneous support that automatically generates a service case. There is no need to run a different module.
• Integration with Dropbox, Google Drive, and more
• Share files during meetings or remote control sessions by using Dropbox, Google Drive, OneDrive, or Box. Have your files available to share from wherever you are. With your data already in the cloud, you save both time and bandwidth.
• Do some final prep work before unlocking the door, or encourage participants to be on time by locking the door after starting a meeting. Don’t worry though, you can always see who is waiting outside and invite them to join.
• The whiteboard is now available during remote control. After all, a picture really can be worth a thousand words when trying to explain something. Both sides of the connection are able to use the whiteboard simultaneously as well.
• BlackBerry App (Preview) The TeamViewer app for Remote Control is now available for BlackBerry: BlackBerry World
• Control computers remotely as if you were sitting right in front of them.
• Transfer files in both directions.
• Enjoy the highest security standards: 256 Bit AES Session Encoding, 2048 Bit RSA Key Exchange.

Additional features for Mac

• Benefit from a seamlessly integrated remote control toolbar specifically designed for Mac OS X Yosemite.
• Customize your QuickJoin and Host modules
• Use a full-featured whiteboard, even during remote control sessions
• Select only what you want to reveal on your screen during meetings by using a highly intuitive application selection feature

Additional features for Linux

• Use Linux computers to provide mobile device support to the ever increasing number of mobile devices under your care.

Download: TeamViewer 10.0 Beta | 8.5 MB (Free for personal use)

A brief on all eligible income tax exemptions applicable for the year 2014-15

Allowances exempted under Section 10 of Income Tax Act

House Rent Allowance:

When rent is actually paid by an individual, he / she is entitled to exemption in respect of House Rent Allowance which is limited to least of the following

1. Actual HRA received.

2. Rent paid less 10% of salary.

3. 40% of Salary (50% in case of Mumbai, Chennai, Kolkata, Delhi) Salary is defined as Basic Pay. Dearness allowance will form part of salary if the same enters into computation of retirement benefits

Leave Travel Allowance or Leave Travel Concession :

LTC or LTA is exempted if the same is actually spent

Transport Allowance:

Transport Allowance granted to an employee to meet expenditure for the purpose of commuting between the place of residence and place of duty. Income Tax Exemption on Transport Allowance is restricted to Rs.800 per month.

Children Education allowance:

Rs. 100/- per month per child up to a maximum of 2 children.

Hostel Subsidy:

Rs. 300/- per month per child upto a maximum of two children.

Other Allowances exempted under Section 10 of IT Act.

Tour TA, Tour Daily Allowance, Academic, research or training allowance, uniform Allowance, Special Compensatory Allowance, High Altitude Allowance, Climate Allowance, allowances applicable to North East, Hilly areas of U.P., H.P. and J & K, border area allowance, Compensatory Field Area Allowance, Counter Insurgency Allowance, High Active Field Area Allowance, island duty allowance, tribal allowance etc.

Income Tax Exemption on Interest paid on Housing Loan / Income or loss from House Property:

Total deduction for interest paid on Housing Loan when the property is self occupied has beenincreased to Rs. 2 lakh as per amendment made in Section 24 of the Income Tax Act in 2014.

Also, in addition to Deduction of of Interest payable on Housing Loan up to Rs. 2 Lakh from the total income (and without any limit for Housing property rented out for an annual value), the new section in the form of Section 80 EE introduced in the last Budget (2013) provides for additional deduction / Income Tax Exemption for Interest paid on housing loan up to Rs. 1 lakh in respect of housing loan sanctioned / disbursed during the year 2013-14 for a first time house buyer with total property cost and amount of loan are not exceeding Rs. 40 lakh and Rs. 25 lakh respectively. This additional deduction of Rs. 1 lakh can either be availed fully in the income tax assessment year 2014-15 (Financial Year 2013-14) or partly in 2014-15 and remaining balance in Assessment year 2015-16 ( Financial Year 2014-15) in case interest payable in A.Year 2014-15 was not exceeding Rs. 1 lakh.

Section 80C:

The total deduction under this section (along with section 80CCC and 80CCD) is limited to Rs. 1.50 lakh. Some investments, savings, expenditure etc covered under Section 80 C are as follows

• Life Insurance Premium
• Premium / Subscription for deferred annuity For individual, on life of self, spouse or any child .
• Sum deducted from salary payable to Govt. Servant for securing deferred annuity for self-spouse or child Payment limited to 20% of salary.
• Contribution made under Employee’s Provident Fund Scheme.
• Contribution to PPF For individual, can be in the name of self/spouse, any child & for HUF, it can be in the name of any member of the family.
• Contribution by employee to a Recognised Provident Fund.
• Sum deposited in 10 year/15 year account of Post Office Saving Bank
• Subscription to any notified securities/notified deposits scheme. e.g. NSS
• Subscription to any notified savings certificate, Unit Linked Savings certificates. e.g. NSC VIII issue.
• Contribution to Unit Linked Insurance Plan of a Mutual Fund
• Contribution to fund set up by the National Housing Scheme.
• Housing Loan Principal amount paid
• Tuition fees paid at the time of admission or otherwise to any school, college, university or other educational institution situated within India for the purpose of full time education of any two children. Available in respect of any two children

Section 80CCC:

Premium Paid for Annuity Plan of an Insurance Company

Payment of premium for annuity plan of LIC or any other insurer Deduction is available up to a maximum of Rs. 100,000/-. (This limit has been increased from Rs. 10,000/- to Rs. 1,00,000/- w.e.f. 01.04.2007).

The premium must be deposited to keep in force a contract for an annuity plan of the LIC or any other insurer for receiving pension from the fund.

Note: The limit for maximum deduction available under Sections 80C, 80CCC and 80CCD(1) (combined together) is Rs. 1,50,000/- (Rs. one lakh and fifty thousand only).

Section 80CCD

(1): Deduction in respect of Contribution to Pension Account (by Assessee}

Deduction available for the amount paid or deposited in a pension scheme notified or as may be notified by the Central Government subject to a maximum of :

(a)          10% of salary in the previous year in the case of an employee

(b)         10% of gross total income in any other case.

Section 80CCD

(2): Deduction in respect of Contribution to Pension Account (by Employer}

Deduction available for the amount paid or deposited by the employer of the assessee in a pension scheme notified or as may be notified by the Central Government subject to a maximum of 10% of salary in the financial year. This exemption is in addition to Rs. 1.5 lakh limit provided under Section 80 CCE for deductions under Section 80 C, CCC, and 80CCD(1)

Deductions under Chapter VIA of Income Tax Act

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

As per the Budget 2012 announcements, a new scheme Rajiv Gandhi Equity Saving Scheme (RGESS) will be launched. Those investors whose annual income is less than Rs. 10 lakh (proposed Rs. 12 lakh from A.Y. 2014-15) can invest in this scheme up to Rs. 50,000 and get a deduction of 50% of the investment. So if you invest Rs. 50,000 (maximum amount eligible for income tax rebate is Rs. 50,000), you can claim a tax deduction of Rs. 25,000 (50% of Rs. 50,000).

Section 80D: Deduction in respect of Medical Insurance

Deduction is available up to Rs. 20,000/- for senior citizens and up to Rs. 15,000/ in other cases for insurance of self, spouse and dependent children. Additionally, a deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 20,000/- if parents are senior Citizen and Rs. 15,000/- in other cases. Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-. From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available.

Section 80DD:

Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction of Rs. 50,000/- w.e.f. 01.04.2004 in respect of

1. Expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative.
2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Further, if the defendant is a person with severe disability a deduction of Rs. 100,000/- shall be available under this section. The handicapped dependent should be a dependent relative suffering from a permanent disability (including blindness) or mentally retarded, as certified by a specified physician or psychiatrist. Note: A person with ‘severe disability’ means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the ‘Persons with disabilities (Equal opportunities, protection of rights and full participation)’ Act.

Section 80DDB:

Deduction in respect of Medical Expenditure on Self or Dependent Relative

A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

Section 80E: Deduction in respect of Interest on Loan for Higher Studies

Deduction in respect of interest on loan taken for pursuing higher education. The deduction is also available for the purpose of higher education of a relative w.e.f. A.Y. 2008-09.

Section 80G: Deduction in respect of Various Donations

The various donations specified in Sec. 80G are eligible for deduction upto either 100% or 50% with or without restriction as provided in Sec. 80G

Section 80GG: Deduction in respect of House Rent Paid

Deduction available is the least of

1. Rent paid less 10% of total income
2. Rs. 2000/- per month i.e. Maximum Deduction available is 24,000/-
3. 25% of total income, provided

• Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
• He should not be in receipt of house rent allowance.
• He should not have self occupied residential premises in any other place.

Section 80GGA: Deduction in respect of certain donations for scientific research or rural development

Section 80GGC: Deduction in respect of contributions given by any person to political parties

Section 80QQB: Royalty Income on patents.

Maximum deduction Rs. 3,00,000/-

Section 80RRB: Royalty Income to author of certain books other than text books.

Maximum deduction Rs. 3,00,000/-

Section 80 TTA: Deduction from gross total income in respect of any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, upto a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account ( not time deposits ) with a bank, co-operative society or post office, is allowable w.e.f. 01.04.2012 (Assessment Year 2013-14).

Section 80U: Deduction in respect of Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability(including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

RELIEF UNDER SECTION 89(1)

Relief u/s 89(1) is available to an employee when he receives salary in advance or in arrear or when in one financial year, he receives salary of more than 12 months, or receives ‘profit in lieu of salary’ covered u/s 17(3). Relief u/s 89(1) is also admissible on family pension, as the same has been allowed by Finance Act, 2002 (with retrospective effect from 1/4/96)