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What is Small Case How is it Different from Mutual Funds Should you Invest

What is Small Case? How is it Different from Mutual Funds? Should you Invest

Leave a Comment / Finance / By / December 7, 2023

What is Small Case? How is it Different from Mutual Funds? Should you Invest: Because of the Lower Fees, Transparency, and various other benefits provided by the Small cases, more than 1 lakh clients have stirred from Mutual Funds to Small cases. Any individual may have got confused about whether to invest or not. That’s a question of million-dollar which shall be addressed in the article today.

First,

What is a Small Case?

A small case is a group of Stocks/basket/ETFs built on a selective Sector, Theme, Idea, or Strategy. Small cases are managed and created by Registered Professionals from SEBI. Small cases are comparable to Mutual Funds but come with higher transparency, better ownership perks, no lock-in period, and lower handling costs.

Let’s follow with an example about the Small case:

Let’s say, Keeping in mind the current pandemic situation. In May 2020, a person decided to invest in Stocks of Pharmaceutical. The individual believes that the companies providing pharmaceutical products will be in great demand in the near future, hence resulting in increased stock prices.

The individual is aware that investing all their money in a single pharmaceutical stock is pretty risky once an individual starts looking for options with lesser risk and comes across a Pharma Tracker Small case.

One should find out that the small case consists of a basket of 9 Pharma Stocks and start exploring more about the Pharma Tracker Small case.

One should finally decide to invest ₹ 1,00,000 in Pharma Tracker Small case in May 2020.

After six months, as of the month of October 2020, the investment value of the individual would be worth ₹ 1,39,460. That’s a growth of roughly 40%.

Getting back to the meaning of the Small case, Pharma Tracker Small case was built on a policy of investing in the Sector of Pharmacy. Similarly, several small cases represent diverse Themes, Strategies, Ideas, Sectors.

What is Small Case

Small Case vs Mutual Funds, Which is Better?

Here are the top differences between Mutual Funds and Small case:

Low Fees: As per Expense Ratio, Mutual Funds charge up to 1.5 – 2% annual fees on the investment amount. On the other deal, only when one transacts, a Small Case charges. The average fee would be 0.2% for Small case Investments. For instance, let’s suppose the investment has grown at the rate of 15% CAGR, and an individual invested ₹ 1,00,000 20 years ago. Here’s what the Value of Final Investment after Fees would look like in the case of Small cases and Mutual Funds:

Transparent: Mutual funds expose the portfolios in the portfolio once every month, but with small cases, one can view the stocks in their portfolio anytime they want.

Dividend Income: In a Small case, the dividends are directly deposited into the individual’s bank account, whereas in Mutual Funds, the dividends are reinvested/added to your investments.

Ownership: One can remove/add stocks from their portfolio in a Small case, but in Mutual Funds, this only can be done by the fund manager.

Lock-in Period: Some Mutual Funds during this period have a lock-in period; one cannot exit their investments. But in the case of a Small case, one can exit the investment anytime the individual want.

Founders of Small Case: Vasanth Kamath, the founder of small cases, wants the consumer to make investing as easy as booking a cab.

The Bengaluru-based startup was established in 2015 by IIT Kharagpur graduates Vasanth Kamath, Rohan Gupta and Anugrah Shrivastava. The small case started introducing a new generation of investors to the Indian equity markets using technology.

They received funding from HDFC Bank(in Dec 2020), DSP Group, Blume Ventures and Sequoia Capital and many others.

The Small Case Team States

The founders are on purpose to change how the people of India invest. The small case is a trusted financial ecosystem made of the Fintech company building together with investors, brokers, advisors, and other market participants. From personal investors to big AMCs, their products are used every day across various markets of India’s capital.

Pros of Small Case

Investments are strategy-based.

One doesn’t have to invest efforts in the analysis of a particular stock. One Get a stock basket.

One can do SIP.

Re-balance of Portfolio.

Cons of Investing in Small Case

The small case is PMS (Portfolio Management Services) of every poor man where the minimum size of a ticket is Rs 50 lakh.

Compared to other modes of investments, various equities like ETFs, Index Funds, Mutual Funds, etc., the Total Investment amount per small case is very high. For example, investing in a small case of default Dividend Aristrocat requires Rs 43,000. At the same time, a person can invest with Rs 500 in a mutual fund. Few Small cases are also available for less than Rs 5000.

All stocks are bought at the same time in a small case, irrespective of the current price. Typically purchasing a stock gives more returns at a lower price.

NO clear idea whether the stocks involved based on the rationale behind the strategy utilised and the research team involved was correct. (One must blindly believe in a sector/idea/strategy relying on the research team expertise of small cases which can go wrong).

NO obvious idea on the RISK metric associated with a small case.

NO proven track account of the past.

NO assistance to re-balance all of an individual’s small case portfolios at once. (one may happen to buy and sell the same stocks in different small cases incurring a loss as an intraday trader. Also, the tax liability, as well as re-balancing, creates churn.)

Why Should One Invest?

One needs to have a long-term view towards investing if they want to put their money in small cases. “Most small cases may not perform as expected in the short run but are designed as long-term investment products. The Investor should consider alternatives if they don’t have a long-term horizon.

However, since the concept of fractional shares does not exist in India, there may not be a minimum ticket price. This may sometimes begin to large minimum investment amounts in instances where stocks like Eicher Motors Ltd or Maruti Suzuki India Ltd [which, as of May 8, trade at a high share price of ₹20,350 and ₹6,650, respectively] are involved in the small case. Small cases as a concept only for well-informed investors consider good. Penetration of Equity in our country is shallow, and in broad conservative products like a mutual fund, the common person still doesn’t seem to participate.

However, as the re-balancing is done by research analysts who are Sebi-licensed for small readymade cases, prior market knowledge is not a pre-requisite. Anyway, the platform itself does not employ any financial advisors, but some amount of handholding may be required.

Income From Other Sources

Income From Other Sources – Saving Bank Account, Fixed Deposit, RD and ITR

Leave a Comment / Income Tax / By / December 7, 2023

Income From Other Sources: Income from Other sources like the interest of Fixed Deposit, Saving Bank Account, Senior Citizen Saving Scheme(SCSS), and Recurring Deposit needs to be shown in the Income Tax return. This article describes Income from Other sources, about what kind of income comes under this head. It discusses Income Tax Return with specific cases of ordinary income such as Saving Bank Account, Fixed Deposit, RD, etc.

Overview of ITR’s Charged on Other Income Sources

ITR-1 used to ask only for the total amount of ‘Income from other sources for the FY 2017-18 or AY 2018-19, but from FY 2018-19 or AY 2019-20 years, all individuals will be required to give a detailed break-up.

Not all income falls under Salary’s heads; House Property, Capital Gain and Business & Profession will be conducted under the head Income from Other Source.

In ITR1 for Financial Year 2018–19 or Annual Year 2019–20, the Income from other sources consists of Interest from Deposit (Fixed/Post office/Cooperative Society//Recurring of Bank), also interest from Saving Bank account, Interest from Income Tax Refund and Any other.

Interest from Other Sources of Saving Account in ITR

Interest that gets gathered in an individual’s savings bank account must be submitted in their tax return under income from other sources. Note that the bank on savings bank interest does not deduct TDS. Interest from both recurring deposits and fixed deposit is taxable, while interest from the account of savings bank and post office deposits to a certain extent are tax-deductible. But all of them are displayed under income from other sources. All are shown under this head for Interest income from savings fixed deposits, bank accounts, or post office savings accounts.

Claim 80TTA Deduction for Interest on Saving Account

Interest on account of savings bank earned up to ₹10,000 per year is allowed as a deduction of the Income Tax Act under Section 80TTA. This limit of ₹10,000 covers interest from all savings accounts with banks, post offices and co-operative banks. If the interest earned from these mention sources exceeds ₹10,000, the additional amount will be taxable under the head of ‘Income from other sources.’

A crucial point to note here is that the deduction under Section 80TTA available is not made as per bank account but on the total interest earned on all the individual’s bank accounts.

Interest earned on time deposits such as fixed deposits, recurring deposits or any other time deposits is not allowed Deduction under Section 80TTA. Also, on bank savings accounts, no tax is deducted at the source of interest income.

Section 80TTA does not apply to senior citizens. The senior citizens under a different section enjoy a higher tax benefit. Interest gained on saving deposits and fixed deposit with the post office or co-operative banks or banks for a max amount of ₹50,000 earned is eligible for deduction under Section 80TTB only by the senior citizen.

Also, there shall be no deduction of tax at the source up to ₹50,000. For every bank individually, this limit of ₹50,000 has to be computed.

Interest on Fixed Deposit and ITR and Income from Other Sources

Fixed deposit interest that a person receives is added along with other income that one has, such as salary or professional income, and the individual at a tax rate that applies to that individual will have to pay tax on that income. TDS is deducted when earned on interest income, even if the individual has not paid it.

Example: The bank will deduct TDS charged on interest accumulated each year on an FD for five years. Therefore, only when the FD matures is that every individual pays the taxes on an annual basis instead of doing it. From 1 April 2018, senior citizens up to Rs 50,000 on the interest income they receive from fixed deposits with post offices, banks, or co-operatives will enjoy an income tax exemption under Section 80TTB.

What is it about Income from Other Sources?

Income earned can be classified into categories during the particular year like :

  • Income from Capital Gain
  • Income from Salary
  • Income from House Property
  • Income from Business & Profession
  • Income from Other Sources: Income that does not fall under the heads of Salary, Capital Gain, House Property, and Business & Profession will come under the category of Income from Other Source. Hence, this is considered as the residuary head of income.

This income is NOT made a fee, i.e. under the Income Tax Act 1961, it is taxable. Section 56 deals cover all such taxable income and with this residuary head of income. Every person is required to enter data of all income earned by you during the year.

Recurring Deposits, Term Deposits and Post office Monthly Income Scheme

Reporting Fixed Deposits

If one has three FDs open, then sum up all the interest income and enter it under the ‘Other interest income’ option.

  • Reporting Recurring Deposits: In the case of Recurring Deposits, Post office term deposits interest earned is taxed as Income from Other Sources. A 10% tax will be deducted on interest earned. The interest earned should be manifested in ‘income from other sources.
  • Exempt Income: The EPF and PPF amount one withdraw after maturity is exempt from tax and must be declared as excluded income from other sources. Note that: After five years of continuous service, the EPF is only tax-exempt.
  • Senior Citizen Scheme: If the interest total income is more than Rs 10,000 in a year, then the TDS or tax deducted at the source is cut. So this amount is treated in the same way as Fixed Deposit.
  • Family Pension: If one is collecting a pension on behalf of someone who is deceased, then one must show this income under income from other sources. There is a deduction of one-third of the family pension or Rs 15,000 received, whichever is lower than the Income through Family Pension. This will be added to the taxpayer’s income, and tax must be paid at the applicable tax rate.

Steps To Find The Deduction Amount From Pension

Mentioned here are few steps to find the Deduction amount from Pension:

Find 1/3 of the amount of the pension.

Check whether the pension is less than 15,000. If yes, then calculate the deduction amount, which is 1/3 of the pension amount; else, it is 15,000

Deduct the pension amount from the pension.

Show the final amount in the previous Step as Income from Other Sources.

Examples of Income from Other Sources

Some examples of Income from Other Sources

Various types of income under Sub-section 2 to section 56 count to be chargeable to tax under the Income from Other Sources head. Few examples of certain incomes normally taxed under or fall under the category of income from other sources are given below:

Dividends: Dividends depending on the residential status of the company are taxable as income from other sources, which are required to pay them out as ordered.

  • Dividend from an India-based company: If the individual company on this receipt has paid Dividend Distribution Tax, the dividend is exempted from chargeable tax. However, the income tax act under section 115BBDA, if a resident firm/individual/HUF received dividends in surplus of ₹ 10 lakhs from Indian companies, then the total amount exceeding the ₹ 10 lakhs mark is taxable at 10% of the total amount.
  • Dividend from a foreign company: Dividend gained from foreign companies as income from other sources is subjected to tax.

One-time income: One-time incomes, which involve winnings from lotteries, card games, crossword puzzles, horse races, and other games of any sort, similar to gambling or betting of any form or nature, are all covered under-compensation.

Compensation ON Interest: Interest received by a resident or taxpayer on the amount of reimbursement or compensation given in situations like compulsory acquisition is taxable under the head of income from other sources.

Interest on securities if the income comes under “Profits and Gains of Business or Profession”, then it is not taxable.

Gifts: Gifts such as any amount of money and immovable or movable property that’s acquired without consideration are also taxable.

Any sum of money received in the course of negotiations as an advance or otherwise for the transfer of a capital asset or wealth shall be charged to tax under this head, if:

  1. Such sum is relinquished; and
  2. The negotiations do not succeed in the transfer of such capital assets.

The following receipts are categorised as income from other sources only if they’re not liable as “profits and gains of business or profession.”

  • Employees’ contribution to welfare schemes.
  • Interest in securities like government debentures or bonds.
  • Rental income from letting out machinery, furniture or plant owned by the assessee.
  • Rental income from letting out machinery, plant, or furniture, along with a building, where these two cases of letting out are inseparable
  • Receipts under Policy of Keyman Insurance.

Examples of Other Receipts Chargeable As Income From Other Sources

Here are few examples of other receipts that automatically happen under this category.

  • Income made from subletting of house property by a resident
  • Casual income
  • Insurance commissions earned by the assessee
  • Family pension payments collected by the legal heirs of dead employees
  • Interest on deposits with companies and bank deposits
  • Interest on given loans
  • Remuneration accepted by Members of Parliament
  • Rent collected from land or vacant plot.
  • Agricultural income collected from agrarian land situated outside India
  • Interest paid on excess payment of advance tax by the Government.

Income from Other Sources in ITR2

In ITR2, an individual has to fill Schedule-OS for Income from other sources:

  • Against item UNDER 1a and 1b, enter the necessary details of aggregate income through interest and dividend, which is not exempt.
  • Against item 1c, indicate the total income from plant or furniture or machinery let on hire and also such income from the building where its letting is integrated from the letting of the said plant or furniture or machinery under the head Profits and gains of business or professionif it is not chargeable to income-tax.
  • Income from maintaining and owning racehorses is to be calculated separately as loss from maintaining and owning racehorses cannot be adjusted against income from any other form of sources and can only be brought forward for set-off against comparable income in subsequent years.
  • Winnings from lotteries, races, games, gambling, betting, crossword puzzles, etc., as per section 115BB of the income tax, are to be subject to special rates of taxation and entered on a gross basis; hence a separate article is provided, and the income from such sources cannot be adjusted against the arising losses under the Income from other sources HEAD.
  • The total income chargeable and computes the Item 5 of this Schedule adds under the head “Income from other sources” and the item 3 + item 4c. If the balance in item 4c, which shows income from maintaining and owning racehorses, is a loss, enter the total of item 3, and please enter 0.

Most of us would have interest in fixed deposits, recurring deposits, savings bank accounts, and company deposits that everyone needs to add together and fill in Interest Gross 1(b).

Irrespective of whether income is exempt from tax or taxable, one should publish it in their return. This article was all about Income from Other sources, what it is, how, how to show it Income Tax Return. In the case of aggregate deposit scheme, which traverses multiple financial years, Recurring Deposits, Fixed Deposits, etc. is recommended that one should show the income earned interest in every financial year. One-time incomes, which involve winnings from lotteries, card games, crossword puzzles, horse races, and other games of any sort, similar to gambling or betting of any form or nature, are all covered under-compensation.

All such conditions mentioned interest income is taxable under “Other sources”. One will be liable to tax based on their income slab. Further, an individual can enjoy a deduction of up to Rs 10,000 on interest received from the recurring deposits and savings account. At the same time, senior citizens from their fixed deposits get a deduction of up to Rs 50,000 on their interest income.

Section 80TTA Deduction Interest Deposits Savings Account

Section 80TTA Deduction Interest Deposits Savings Account

Leave a Comment / Finance / By / December 7, 2023

Section 80TTA Deduction Interest Deposits Savings Account: A Savings Bank Account is the most general account for individuals. When an individual has money in a bank savings account, their ey, they are required to pay the tax on it.

But Income Tax Department under section 80TTA gives a deduction of up to Rs 10,000 on interest collected on all their saving bank accounts. This article helps calculate the interest in saving bank account, the interest on considered Income from other sources, and taxing Saving Bank account. This explains what section 80TTA is and how it influences tax on interest from saving bank account.

Overview of Saving Bank Interest, 80TTA

The interest is actually calculated on the daily balance in your account.

Before April 2010, the interest was actually calculated on the lowest amount in the bank account between the 10th of every month and the last business day of that month.

In Apr 2010, the Reserved Bank of India moved to calculation on an everyday basis.

On a daily basis, interest rate calculations are done, and the interest is credited to the account only at the end of half-year or each quarter.

Interest collected on Saving Account is acknowledged as Income from other sources. This requires to be declared in their income tax returns.

No TDS is subtracted from the interest on Saving Bank Account.

It is taxed based on the income slabs of the individual.

As per Section 80TTA of 1961’s Income Tax Act, which implements Deduction up to Rs. 10,000 to a HUF/Individual from Gross Total Income towards Interest on all the saving bank Accounts (not the Fixed deposits).

An individual is required to add the interest from the saving account to Income from additional sources and then demand deduction under section 80TTA. If a person’s total interest income from all their saving bank accounts is equal to or less than Rs 10,000, For example, if the total interest of a person from all saving bank accounts is Rs 8,000, then they are required to show 8000 in income from additional sources and then record Rs 8000 for section 80TTA.

If the final balance is more than Rs 10,000, say 13,000, then one should add 13,000 to Income from additional sources and then show Rs 13,000 in Section 80TTA. ITR should automatically provide the person with a deduction for 10000 and calculate tax on the rest.

If you have a doubt about Interest on a Saving Bank account in Income Tax Return then as explained in our article, tax on Income obtained in India depends on the type of Income, for example, Income from Pension or Salary, Income from House Property etc. Under the category of Income from Additional Sources from ITR1 and ITR2, Income Interest from Saving Bank Account falls in.

Income Tax Return Forms have section 80TTA in Deductions under Chapter VI-A along with 80C, 80D for ITR1. (It’s similar for ITR2) One is required to add interest from their saving account to Income from additional sources, and then they can claim the deduction under section 80TTA. If a person’s total interest income from all their saving bank accounts is equal to or less than Rs 10,000, For example, if the total interest of a person from all saving bank accounts is Rs 8,000, then they are required to show 8000 in income from additional sources and then record Rs 8000 for section 80TTA.

If the final balance is more than Rs 10,000, say 13,000, then one should add 13,000 to Income from additional sources and then show Rs 13,000 in Section 80TTA. ITR should automatically provide the person with a deduction for 10000 and calculate tax on the rest.

Interest on Saving Bank Account

How has the interest rate on the Saving Bank account changed over the years?

The interest rate has been around 4% but was about 6% in 1992, on Saving bank account. From the year 2003 to Jul 2011, the Interest rate was fixed at 3.5 %. Every bank had to offer a similar interest rate to all its consumers. Till Oct 2011, it was regulated by the Reserve Bank of India.

Deregulation: The Reserve Bank of India (RBI) deregulated the saving bank interest rates on 25th Oct 2011. The banks will have to offer a consistent interest rate on securities in saving account up to Rs 1 lakh. For savings deposits above the amount of Rs 1 lakh, the banks will be free to offer a varying interest rate. The minimum interest rate was set to be 4% for up to 1 lakh amount in Saving Bank by RBI in 2011.

The Reason behind different Banks offer different interest rates:

In October 2011, the Reserve Bank of India deregulated the rates of interest on savings accounts in India. Banks were now free to determine the same within specific conditions imposed by RBI.

Method Of Calculation Of Interest On The Saving Bank Account?

The interest is actually calculated on the daily balance in your account. Before April 2010, the interest was actually calculated on the lowest amount in the bank account between the 10th of every month and the last business day of that month. In Apr 2010, the Reserved Bank of India moved to calculation on an everyday basis.

Say on 1st September Rs 80,000 is credited into an individual’s account. On 5th September, after some withdrawals balance in the person’s account is Rs 55000. The person had Rs 80,000 for four days. Suppose interest is 5% per annum. So how much interest did the individual earn?

The formula is:

Interest = Principal or amount in the account x Daily Interest x RateNumber of days.

Daily Interest Rate = rate of interest per annum /365 days

At 5% Daily Interest Rate is: 5%/365 = 0.013698%

Example of the steps to calculate interest on Saving Bank Account?

Say Samriddhi had a balance of Rs 85,000 on April 1. She received a payment of Rs 300,000 on May 15 from the sale of some policy units. On May 29, she made a payment of Rs 320,000. This resulted in her account balance lessening to Rs 65,000.

For the first 14 days of May, interest to be paid would be calculated on Rs 85,000, i.e. 130.41

For the next 14 days of May, interest to be paid would be calculated on Rs 385,000, i.e. 590.68

For the balance of 2 days, interest to be paid would be calculated on Rs 65,000. i.e. 14.25

Therefore, the Total interest earned is Rs. 735.34.

When Is The Gained Interest Credited To The Consumer Account?

Though on a daily basis, the interest rate calculations are done, the interest is credited to the individual’s account half-yearly or at the end of each quarter. Today, each bank serves its own schedule, including half-yearly, monthly, and quarterly for paying interest rates on savings accounts. For example, State Bank of India on 30 June and 31 Dec, HDFC banks credit interest on 31st Oct and 31st Mar.

Income Tax and Interest on Saving Bank Account

What is Section 80TTA of the Income Tax Act?

The Finance Bill or Budget 2012 implanted a new section 80TTA in the Income Tax Act of 1961, which implements Deduction up to Rs. 10,000 to a HUF/ Individual from Gross Total Income towards Interest on saving bank Account (not being time deposits).

This abatement is not granted to the saving account of a firm, an association a body of individuals or persons.

Saving a bank account should be sustained within a bank or society, or post office.

The deduction allowed is interest earned or Rs. 10,000, whichever is lower.

If the interest gained is more than 10,000, then the taxable balance amount will be as before, i.e. considered as taxed as per your slab rate and Income from Sources.

Under section 80C, the deduction of the Income Tax Act-1961 states in addition to a deduction of Rs. 1 Lakh. Please regard that Interest from Saving Bank Account as a deduction and not an exemption.

The interest received on the savings account is spared from TDS under Section 194 A of the Income Tax Act, i.e. No TDS is deducted on interest from the saving account of an individual.

The section was made applicable from April 01, 2012, and was applied from Annual Year 2013-14 and onwards.

For example, if the interest received is Rs. 13,500 on saving bank account, then effectively, only Three thousand five hundred rupees will be taxable.

The deduction makes the scheme of non-filing of returns by salaried taxpayers in case of salary income plus savings bank interest up to Rs 5 lakh more friendly, under Section 80TTA.

Is TDS Deducted On The Interest On The Saving Bank Account?

No TDS is not deducted on interest irrespective of the amount of interest earned on the Saving Bank account. Interest from the Saving Bank account does not manifest up in Form 26AS, as TDS is not deducted.

Is Interest Gained In The Saving Account Of A Bank Is Taxable?

Income from other sources is considered as Interest earned on Saving Account. This requires to be declared in their income tax returns. No TDS shall be deducted from the interest on Saving Bank Account. Before 1st Apr 2012, the interest was taxed based on individual income slabs.

From FY 2012-13, a deduction from all the bank accounts up to the extent of Rs 10,00 in interest is granted to an undivided Hindu family or individual under the new section 80 TTA of the Income-tax Act; Interest over Rs 10,000 will be taxed at the peripheral tax rate of an individual. This is relevant from the assessment year 2013-14(Financial Year 2012-13) and consequent assessment years. Note: This deduction is not on Fixed Deposit or RD but just for interest on the Saving Bank account.

Is The Deduction All Saving Bank Accounts Or Per Saving Bank Account Together?

The deduction towards interest on all saving accounts taken collectively cannot surpass Rs. 10,000. This deduction is available on the interest income from all savings bank accounts that a taxpayer might have in banks, post offices or cooperative societies. One cannot have multiple deductions for multiple savings bank accounts.

Example: If an individual gets Rs. 24,250 from three saving accounts, the person will be authorised to Rs. 10,000 only as deduction under section 80TTA & the balance amount of Rs. 14,250 will be taxable as earlier.

What Is The Interest, And How Much Money Should Be In The Account(S) To Earn Rs 10,000 Interest Income?

A person is required to have, to earn an interest income of Rs 10,000

Rs 1.6666 lakh at 6% (.06 * 166660)

Rs 1.42 lakh at 7%

Rs 2.5 lakh at 4%

Self-Assessment Tax:

If the saving bank interest of an individual is more than 10,000, then the person might have to pay Income Tax as per their Income Slab for the balance amount. One would know this in Tax Payable in the ITR.

Note: Many times; due to loss due to House property or Capital Gain, it may get cancelled.

When someone needs to pay tax, Self-Assessment or Regular Assessment tax, Tax Payment Challan, Advance Tax, to pay Income Tax due, ITNS 280 Challan is used.

Self-Assessment Tax, Pay Tax using Challan 280, Updating ITR

It can be paid through cheque or cash by going to a designated branch which is called Offline or physical payment. If an individual has net banking, it can also be paid online.

Select Challan No./ITNS 280(Payment of Income Tax & Corporation Tax)

Select Tax Applicable as (0021 – Income Tax – Other than Companies)

Select Assessment Year. One should be very careful while selecting Assessment Year. For registering ITR before 31 Jul 2016 for income gained between Apr 2015 to 31 Mar 2016 FY is 2015-16, and AY is 2016-17

Then select the type of payment the individual wants to opt for (300) Self-Assessment Tax and fill in the rest details. (You don’t have to fill in Name). It will be filled based on the address and entered PAN detail.

Methods Of Accounting Accrual Cash

Methods Of Accounting Accrual Cash | Accrual Basis and Various Methods of Accounting

Leave a Comment / Income Tax / By / December 2, 2023

Methods Of Accounting Accrual Cash: The post attempts to explain the two methods of accounting – cash and mercantile (accrual).

  • Under the cash method of accounting, the incomes and expenses are taken under consideration on the actual receipt of payment.
  • Under the mercantile or accrual method of accounting, incomes and expenses are taken into consideration as and when there arises a “right to receive” or “right to pay”.
  • Accrual accounting implies the revenue and expenses are recognized and recorded when they occur, while cash basis accounting indicates these line items aren’t documented until cash exchanges hands.
  • Cash-based accounting is more straightforward. However, accrual accounting portrays a more accurate view of a company’s health by including the accounts payable and accounts receivable.
  • The accrual or mercantile method is the most commonly used, especially by publicly traded companies, as it smooths out earnings over time.

But why are we talking about the methods of accounting? Let’s discuss.

Why are We Discussing The Methods Of Accounting?

Suppose one makes a Fixed Deposit of Rs 1,00,000 for three years at the rate of 10% p.a on 1st April 2011 (the financial year 2011-2012 or the Assessment year 2012-13) in the cumulative option.

This implies that the interest rates are going to be calculated each quarter, and the interest is then reinvested into the fixed deposit. Interest from the Fixed Deposits are considered as Income from Other different Sources and is taxable.

The bank deducts tax or TDS if the interest income is more significant than Rs 10,000 in a financial year. The interest in various quarters is given below using Rupee times.

Calculator on Fixed Deposit

Quarter Interest after every quarter (in Rs) Balance (in Rs)
1. 2500.00 102500.00
2. 2562.50 105062.50
3. 2626.56 107689.06
4. 2692.23 110381.29
5. 2759.53 113140.82
6. 2828.52 115969.34
7. 2899.23 118868.58
8. 2971.71 121840.29
9. 3046.01 124886.30
10. 3122.16 128008.45
11. 3200.21 131208.67
90.5625 days. 3253.27 134461.94
Total: Total Interest:  Rs 34461.94 Maturity Amount:  Rs 134461.94

So, the interest in a year is more than Rs. 10,000. So, the question arises do we account for the interest each year or on maturity at the end of the three years? To answer this question, a proper understanding of the methods of accounting is required.

This is because the scope of Income and its taxability always depending upon a system of accounting that is followed by the assessee.

Various Methods of Accounting

There are two different methods of accounting, Cash and Mercantile or Accrual method.

Cash Basis Of Accounting

Under the cash basis of accounting, transactions are recorded when the actual cash is received or paid. It implies that the Income is recognised when the cash is accepted, and the expenses are recognised when the money is spent.

It does not really matter whether the money paid or received belongs to the current, past, or future year. Hence, there is no scope for recording the credit transactions. This basis of accounting is also referred to as the Receipts basis of accounting.

Accrual Basis Of Accounting

The accrual basis of accounting is also known as the Mercantile basis of accounting. It is the system where the transactions are recorded when they arise. It does not really matter whether the cash is received or paid or not. It implies that the incomes are recorded in the books of the accounts when earned, irrespective of whether it is received or accrued.

The cash method of accounting productively postpones (but does not permanently reduce) your tax liability to the year of actual receipt of Income. In contrast, under the mercantile method, the tax on the income has to be paid even if the Income has not been received.

EXAMPLE: Rent accrued is Rs. 1,000. (earned but not received)

Similarly, expenses are recorded in books of accounts when they are incurred; it does not matter whether the cash is paid or outstanding.

This system is most widely used and followed by each business organisation.

Hybrid or Mixed Basis of Accounting

This can be considered as a third method.  Not the typical kind. Accountants have tried to merge the advantages of the two systems (cash and accrual) and have come up with the mixed or hybrid basis of accounting.

In this method, both cash basis and accrual basis are followed. Incomes are recorded on a cash basis, whereas expenses are taken on an accrual basis. The net income is discovered by matching the costs on an accrual basis with income on a cash basis.

This is the most conservative basis of accounting because all possible expenses relating to the period, whether paid or not, are considered. In contrast, payment only received in cash is taken into consideration. This method is followed by professionals like Doctors, Lawyers, and CAs but not commonly used.

Difference Between The Cash And Mercantile System Of Accounting

Basis of Differentiation Cash System of Accounting Mercantile (Accrual) System of Accounting
Record of Transactions It records only the cash transactions. It records cash along with credit transactions.
Record of Incomes Only those incomes are recorded that are made in cash. All the incomes are recorded whether the money is accepted for the same or not.
Record of Expenses Only those expenses are recorded, which are paid in cash. All the costs are recorded whether money has been paid for the same or not.
No adjustments in regards to Outstanding expenses, Accrued Income, Income received in advance, and prepaid expenses are passed. All adjustments regarding Outstanding expenses, Accrued Income, Income received in advance, and prepaid expenses are passed.
Capital and Revenue items This system doesn’t differentiate between capital and revenue items. This system differentiates between capital and revenue items.
Legal Recognition This system is not recognised by the Companies Act, 2013 and Income Tax Authorities. This system is recognised by the Companies Act, 2013 and the Income Tax Authorities.
Ascertainment of the Accurate Profit or Loss This basis doesn’t provide a correct view of profit or loss as this does not make a complete record of cash or credit transactions. This basis offers an accurate view of profit or loss because this produces an entire record of cash or credit transactions.
Non-cash Items It doesn’t record the non-cash items like depreciation etc. It makes the record of the non-cash things like depreciation etc.
Suitability This method is suitable for professional people such as lawyers, doctors etc. This method has been adopted by the business houses which are involved in the Trading as well as Manufacturing business.
Period It records all the incomes which are received and expenses paid in cash related to current, past, or future year. It records the incomes and expenses associated with the current year only.
Simple and Easy This method of accounting is simple and easy to adopt and apply. This basis of accounting includes all the technicalities of accounts and hence is challenging to use.
Evidence in Court The records maintained as per this system cannot be accepted as a piece of evidence in the court of law. The records maintained as per this system are accepted as evidence in the court of law.

Income Tax and Method of Accounting

Under the Income Tax Act, there have been five heads of Income stated

  • Salaries,
  • Income from business or profession,
  • Income from house property,
  • Income from other sources and
  • Capital gains

As far as the three of these heads of Income–salaries, capital gains and Income from house property–are concerned, a taxpayer has no option but to follow the mercantile (accrual) method of accounting. For instance

  • Salary relating to a specific year is taxable in that year itself irrespective of whether it has been received or not
  • Rent receivable for a house property that has been let out is taxable regardless of whether it is received.
  • Capital gains are chargeable to the tax in the year in which the asset is transferred, regardless of whether the sales consideration is received.

When talking about Income under the heads of ‘Profits and Gains of business or profession’ and ‘Income from other sources (like business profits, professional Income and investment income other than capital gains), we have the option to choose to account for them on either the basis of – cash or mercantile.

This has been specified in Section 145 of the Income-tax Act, 1961. The assessments followed yet another accounting system before enacting section 145 in the assessment year 1997-98, called the hybrid system.

With respect to Fixed Deposits Clause, 14 of The Bank Term Deposit Scheme, 2006, which became effective from 28-07-2006, clearly stipulates a choice for the subscriber to pay tax on interest on an accrual or receipt basis, which states

Interest on these term deposits must be liable to tax under the Act based on annual accrual or receipt, depending upon the method of accounting, which is followed by the assessee.

The tax payable on such interest shall be deducted following section 194A or Section 195 of the Act.

Different Accounting Methods can be Used

The method of accounting differs for each source of income, but within a particular source of income, the process must be the same for all items.

While a one-time change in accounting is usually allowed, changes in the process of accounting from year to year for income from the same source to save taxes are not.

How Can One Choose The Accounting Method?

One must also examine the nature of income and the deductions that are available before deciding whether to account for the income on the basis of cash or mercantile.

Income not guaranteed: In case there is a risk for companies defaulting on their own interest payment obligations in respect of the company fixed deposits (FD) and the debentures, it is well-advised to account such income on the basis of cash so that one doesn’t end up paying tax on the income that they do not eventually receive.

Amount of interest: If one decides on using the cash accounting method for interest on cumulative deposits, i.e. they pay tax only on receipt of the interest, then the interest paid on maturity will be higher as it is a lump sum. For example: if 50,000 Rs are invested in a span of 3 years, then the interest breaks up after every quarter using Rupee times: Calculator on Fixed Deposit is given below.

Quarter Interest (in Rs.) Balance (in Rs.)
1. 1250.00 51250.00
2. 1281.25 52531.25
3. 1313.28 53844.53
4. 1346.11 55190.64
5. 1379.77 56570.41
6. 1414.26 57984.67
7. 1449.62 59434.29
8. 1485.86 60920.14
9. 1523.00 62443.15
10. 1561.08 64004.23
11. 1600.11 65604.33
90.5625 days. 1626.64 67230.97
Total Total Interest Earned Rs 17230.97 Final Balance Rs 67230.97

Assuming That They Started Fixed Deposit on 1st April

  • Interest for the first year is 5190.64
  • Interest for the second year is 5729.50
  • Interest for the third year is 6310.83

Cumulative interest is 17230.97. So on a mercantile basis, one will be paying interest on smaller amounts every year(5190.64,5729.50,6310.83), while on a cash basis, one will be paying in one go for Rs 17230.97.

Interest eligible for deduction under section 80C: However, where the interest on such deposits is suitable for a deduction under section 80C, such as the National Saving certificates(NSC), it may be helpful to follow the mercantile method and claim for the deduction every year, rather than allowing the interest to accumulate and be taxed on maturity by following the cash method.

Tax Deducted at Source or TDS: If one follows the cash method of accounting, one crucial aspect to keep in mind is that the tax credit for the tax deducted at source on such income will be available only in the year in which such payment is offered to tax, though, the tax will generally be removed by the payer on an accrual basis every year.

Thus, one needs to ensure that the tax deduction certificates (irrespective of the year they were issued) are matched with income offered to the tax during the relevant year. Now with TDS information available in Form 26AS, it’s easier to find the TDS. One might get a letter from the Income-tax office for TDS.

For instance, one had opened a Fixed Deposit in a bank for five years. They will get Form 16A from the bank in which the TDS will be deducted for their Fixed Deposit, but this will not be reflected in Form 26AS.

Now, if they filed the return, including the TDS from the bank deposit. They will get the letter from Income Tax saying their TDS claim does not match the Form 26AS and they need to pay the balance amount. To avoid a hassle in one must pay the amount. Then the Form 26AS will get updated with the TDS from the bank account.

Premature Closure or Withdrawal: Investment like fixed deposit can be closed or withdrawn before the original term of the FD.

Base Fare, UDF, Passenger Fees, Fuel Surcharge, Fees And Charges Of Airlines

Base Fare, UDF, Passenger Fees, Fuel Surcharge, Fees And Charges Of Airlines

Leave a Comment / Finance / By / December 2, 2023

Base Fare, UDF, Passenger Fees and Fuel Surcharge: What Is Base Fare? A base fare on a plane ticket is the price of the airline ticket before the addition of fees, taxes, and any surcharges. In most cases, a traveler’s base fare is going to be lower than the final price of the ticket. Some fares, such as ones to any international destinations, might increase significantly from the base fare when the additional taxes are added.

Fees Added To A Base Fare

Airlines are now adding fees to the base fare for things that were earlier be included in the price of the ticket. People are getting used to the baggage fees, but that is only one example of the fees.

One can now be charged for food and beverages, reserving a premium seat (not just a first-class seat but also a window or aisle seat might incur a fee), getting an advance seating assignment, a second carry on, early boarding, and even to have services from the airport ticket agent to do things such as print the boarding pass for you.

When a discount is offered, it is generally on the base fare. For instance, an airline offers a 30% discount for Rs. 10,000 tickets from Kolkata to Gujarat. One may think that the discount is being offered on Rs.10,000. However, that is not the case. The discount is only being provided on the base fare.

Hence, if the base fare is Rs. 2,500, the discount is Rs 750, and then the ticket will cost Rs 9,250. Let’s take a look at the other costs, Fuel surcharge, taxes, User development fees which inflate the price of the ticket.

Fuel Surcharges, User Development Fees, PSF Charges By Airlines

Fuel surcharge, Indian Airlines started charging this component on every ticket to account for the volatile fuel prices somewhere during 2005-06. Fuel surcharge benefits airlines offset part of their operations costs in which fuel bills contribute the most – nearly 40 percent. This is charged globally.

The majority of the airlines, including the Emirates, American Airlines, British Airways and Qantas, involve a fuel surcharge in the original price of the ticket. Other airlines add on a fuel surcharge during the booking process.

The airport charges User Development Fee (UDF) for each departing passenger, a charge levied by the airport operator on passengers for recovering the investment that is made on the development of the airport. The User Development. Charges vary from Airport to Airport and also for domestic arrival and domestic departure and International departure.

For example, for Bangalore UDF, in June 2014, Rs 260 and Rs 1,070 for the international passengers and UDF for Ahmedabad is Rs 124 for domestic flights and Rs 466 for international departure. UDF or User Development Fee at different airports can be found on the webpage of AirIndia on UDF.

Several airlines charge other fees such as convenience fees or the Printout charges from their passengers.

Name Agency Brief Description
Base Fare Accrued by the airline The fare charged by the Airline. Discount offered by the airline is generally on this fare.
CUTE Fee The AAI (Airport Authority of India) and the private airports at New Delhi, Mumbai, Kochi, Bengaluru and Hyderabad. Common User Terminal Equipment for services such as check-in etc.
Goods and Service Tax 12% for premium and 5% for the economy (for both domestic and international)
Passenger Service Fees The AAI (Airport Authority of India) and the private airports at New Delhi, Mumbai, Kochi, Bengaluru and Hyderabad. For covering Security and Facilitation all the AAI airports as well as private airports.
User Development Fees The AAI (Airport Authority of India) and the private airports at New Delhi, Bengaluru and Hyderabad. For funding passenger facilitation at selected airports, levied by the airports.
Fuel Surcharges Accrued by the airline Airline fuel surcharge to account for the volatile fuel charges.

The Base Fee and the Fee Surcharge varies according to the airline.

A CUTE fee is Rs 50.

User Development Fee (USD) and Passenger Service Fee

User Development Fee (USD) and Passenger Service Fee (each departing passenger) is charged at some significant airports is as stated below: –

Airport D/I Passenger Service Fee User Development Fee
Chennai Domestic 0 81
Chennai International 0 81
Amritsar Domestic 91 177
Amritsar International 105 1240
Bengaluru International 0 1447
Bengaluru Domestic 0 361
Mumbai Domestic 0 0
Mumbai International 0 328
Tiruchirappalli Domestic 91 177
Tiruchirappalli International 105 491
Vishakhapatnam Domestic 0 354
Delhi Domestic 91 0
Delhi International 91 0

 

Pay and Perks of Indian MP, MLA and Prime Minister

Pay and Perks of Indian MP, MLA and Prime Minister

Leave a Comment / Finance / By / November 28, 2023

About the Legislative Assembly Member (MLA)

The Indian political structure has a three-tiered federal design, with every level providing administrative positions. According to the Constitutional Provisions of India, the Federation or Central Government is the country’s highest regulatory assemblage.

It outlines a portion of its responsibilities to the representative federal entities that represent each state’s State And local governments. This is the second level in the construction.

In other words, each state is vested with exclusive constitutional action and is overseen by the governing authorities in each state. The local-level Government of Panchayats and Municipalities is the third layer of the federalist system.

The State Legislative Assembly is the legislative body of a state in India. Much the same as the central Government has the Parliament as its legislative body, and each state has its own regional Parliament called the legislative assembly.

The parliament-passed legislation, on the other hand, stretches to the whole country. Instantaneously, the provisions issued by the state legislative assembly correspond only to that particular state.

State Legislative Assembly is likewise called Vidhan Sabha. In addition, states either have a unicameral or bicameral assembly.

Unicameral typically includes only one legislative chamber, whereas bicameral refers to having two authoritative chambers.

In the bicameral framework, the lower House of a state’s legislature is categorized as the State Legislative Assembly, and the upper House is known as the State Legislative Council.

India as a country consists of 28 states and nine union territories. 22 of the 28 states have unicameral state legislatures, while six have bicameral state legislatures. Three of the nine union territories have state legislative bodies.

What Exactly is a Member of the Legislative Assembly?

MLA is an abbreviation for Member of Legislative Assembly. A state legislative assembly a particular number of electorates relying upon the state’s demographics.

A candidate is chosen directly by the constituency members and who at that point becomes a Member of the Legislative Assembly or MLA. MLAs are elected for a five-year term.

Qualification Standards for an MLA Candidature

  • A person must be a citizen of India and must be at least 25 years old.
  • A person must also be a suffragist or elector for any Legislative Assembly constituency in that state under the Representation of the People Act, 1951.
  • An individual does not hold any profit-making office under the Government of India or any state government other than a Minister for the Indian Union.
  • A person’s mind must be of sound mental health.
  • An individual cannot remain an MLA if he or she has been convicted by a court or charged and convicted in any particular case, according to the Representation of the People Act, 1951.

The Procedure Followed for Electing an MLA

After the Legislative Assembly’s current tenure expires, the members are elected directly by the voters of each district. Elections to the Legislative Assembly are organized in each state at regular intervals on a five-year cycle.

One should take note of the fact that the assembly elections to every one of the states are not held together around the same time. Representatives are directly elected by an electorate that votes in accordance with universal suffrage.

Each Legislative Assembly Member is expected and essentially needed to address and voice the worries of their constituents.

The Governor of a state has the authority to choose one individual of the Anglo-Indian minority when they believe that the community does not have sufficient representation in the assembly and needs satisfactory portrayal.

The MLA’s Position and Duties

  1. Legislative authority – MLAs utilize their parliamentary power when it comes to enacting legislation. A bill will not become law in the event that the bill doesn’t gain the approval of the majority of MLAs in the House.
  2. Financial authority – The legislative assembly makes all economic decisions. It would be not easy to pave the way for the entire state’s development without appropriate monetary, budgetary allocations. After submitting a concise report of formative exercises in their separate legislative constituency, MLAs receive budget approval from the state.
  3. Electoral rights – When it is time to choose the President of the country, elected MPs and MLAs are given the opportunity to carry out their electoral obligations. They vote in Favour as to who will become the succeeding President.
  4. Executive authority – The efficacy of any scheme is dependent on its timely execution. MLAs discharge their corporate management here. They must guarantee that all potential recipients receive the guaranteed advantages. Aside from that, MLAs maintain that government offices do their part appropriately.
  5. Constructional rights – Based on the current Constitutional Provisions of India, a portion of the state rules can be changed if a bill has the assent of at least half of the elected MLAs in the provincial legislature.

An MLA’s Pay

A Member of the Legislative Assembly of a state in India, as a Member of the Parliament of the nation, receives few different recompenses other than the fundamental compensation, such as constituency compensation, sumptuous remittances, expense allowances, and day by day recompenses.

MLAs’ annual remuneration fluctuates, relying on their month-to-month pay rates determined by the particular jurisdiction.

According to the provisions, as mentioned in Article 164 of the Indian Constitution, the allowance of an MLA in the country is determined by the respective state legislatures. As a result, it differs starting with one state then onto the next.

Telangana currently pays the most significant wage to MLAs, Rs. 2.5 Lakh a month, compared to other states. Tripura, on the other hand, offers the lowest paycheck to MLAs at Rs. 17,500.

Different Additional Advantages

Aside from their monthly income, MLAs often obtain additional resources to pay other expenditures. They have an everyday stipend for gasoline bills. Besides that, government authorities cover both their official and recreational tours.

The state authority compensates their office personnel. The Government also provides them with medical services. As a duly elected MLA, each and every one of them is entitled to extra payments to pay for lodging, phone and other communication services, and utility bills.

Former MLAs are Eligible for A Pension

When a member retires from their MLA role, they are entitled to a pension for life from the provincial Government.

The sum of the grant will be determined by the last paycheck received. If the previous MLA dies, his or her partner will receive the benefit of the pension as a family pension.

Each state has Its Own Pay Structure

The salaries paid by different states are listed below.

  • Telangana offers a salary of 2,50,000 (Two lakh fifty thousand) per month to the members of the legislative assemblies.
  • Uttar Pradesh pays a monthly salary of Rs.1,87,000 (One lakh eighty-seven thousand) to the Members of the legislative assembly.
  • Andhra Pradesh offers a monthly remuneration of Rs.1,30,000 (One lakh thirty thousand) to the Members of the legislative assembly.
  • Delhi offers a salary of Rs.2,10,000 (Two lakh ten thousand) per month to the Members of the legislative assembly.
  • Maharashtra has a salary structure of Rs.1,50,000 (One lakh fifty thousand) per month for the Members of the legislative assembly.
  • Members of the legislative assembly in Himachal Pradesh are paid a monthly salary of Rs.1,25,000 (one lakh twenty-five thousand).
  • Tamil Nadu has a monthly salary of Rs.1,13,000 (One lakh thirteen thousand) per month for the Members of the legislative assembly.
  • Madhya Pradesh offers a monthly salary of Rs.1,10,000 (One lakh ten thousand) to the legislative assembly members.
  • Haryana’s legislative assembly members are paid a monthly stipend of Rs.1,15,000 (one lakh fifteen thousand).
  • Jharkhand pays Rs.1,11,000 (One lakh eleven thousand) per month to the Members of the legislative assembly.
  • Chhattisgarh offers a salary of Rs.1,10,000 (One lakh ten thousand) per month to the Members of the legislative assembly.
  • Goa gives Rs.1,00,000 (One lakh) per month to the Members of the legislative assembly.
  • Punjab has a monthly salary of Rs.1,00,000 (one lakh) for the Members of the legislative assembly.
  • West Bengal offers a monthly remuneration of Rs.96,000 (Ninety-six thousand) to the legislative assembly members.
  • Bihar has a pay scale of Rs.1,00,000 (One lakh) per month for the Members of the legislative assembly.
  • Karnataka offers a salary of Rs.60,000 (Sixty thousand) per month to the Members of the legislative assembly.
  • Gujarat pays a monthly salary of Rs.47,000 (Forty thousand) to the Members of the legislative assembly.
  • Sikkim pays Rs.52,000 (Fifty-two thousand) as the monthly salary to the Members of the legislative assembly.
  • Rajasthan provides a monthly salary of Rs.40,000 (Forty thousand) to the Members of the legislative assembly.
  • Kerala provides a salary of Rs.42,000 (Forty-two thousand) per month to the Members of the legislative assembly.
  • Odisha has a pay structure of Rs.30,000 (Thirty thousand) per month reserved for the Members of the legislative assembly.
  • Uttarakhand offers a monthly salary of Rs.35,000 (Thirty-five thousand) to the Members of the legislative assembly.
  • Arunachal Pradesh has a monthly salary structure of Rs.25,000 (Twenty-five thousand) for the Members of the legislative assembly.
  • Manipur offers a monthly remuneration of Rs.18,500 (Eighteen thousand five hundred) to the Members of the legislative assembly.
  • Meghalaya pays a salary of Rs.28,000 (Twenty-eight thousand) per month to the Members of the legislative assembly.
  • Nagaland offers a monthly salary of Rs.18,000 (Eighteen thousand) to the Members of the legislative assembly.
  • Tripura has a salary structure of Rs.17,500 (Seventeen thousand five hundred) per month for the Members of the legislative assembly.
  • Assam provides a monthly salary of Rs.20,000 (Twenty thousand) to the Members of the legislative assembly.

What Exactly is a Member of Parliament?

Aside from MLAs, MPs, or Members of Parliament, grab a chair in the legislative House. These people have a specific role within the administrative House. These individual people may appear from both political and non-political foundations.

An MP’s Position and Functions

The elected MPs have three essential obligations.

They host their commitments towards their respective political party, their electorate or voting demographic, and the Parliament.

They host their commitments towards their respective political party, their electorate or voting demographic, and the Parliament.

When the Parliament is in session, they are supposed to secure parliamentary meetings.

They actively participate in the voting process and other democratic interactions and play an important role in enacting legislation.

Every one of the MPs must raise the topics that are prevalent in their respective legislative zone.

They should do whatever it may take to eliminate these issues from their constituencies.

Monthly Salary of an MP

A Member of Parliament gets a monthly pension of Rs. 1 lakh. Previously, they were entitled to a less sum of money.

With the revision of the Pay Commission, the sums have been expanded to remunerate the MPs sufficiently.

Salary Every Year

Each MP receives a yearly compensation of up to Rs. 12 lakhs. A gauge shows that consistently, the central Government spends up to Rs. 2.7 lakhs a month on each MP.

This figure incorporates the salaries as well as all other fixed provisions.

Details on Allowances and Other Extra Perks

Previously, each MP was entitled to Rs. 45,000 as constituency reimbursement. However, currently, MPs will obtain Rs. 70,000 as constituency allowance after the revision of the pay commission.

In addition, their office salary has been gone up Significantly from Rs.45,000 to Rs. 60,000. The furniture budget was Rs. 75,000, but the Parliamentary committee multiplied it to Rs. 1 lakh.

Aside from that, they would get resources to pay for their official employees. They will likewise get an extra travel recompense.

Pension Specifics of former MP

The Indian Constitution also has a clause for retired MPs to get a pension benefit. The central Government would include a monthly pension to all people who have formerly served as Members of Parliament.

Each and every former MP will earn a monthly pension of Rs. 20,000. If the person served as an MP for more than five years, he or she would be entitled to an additional payment of Rs. 1500.

Besides these benefits, retired legislators would be eligible for free AC train tickets and medical treatment facilities. After the death of the former MP, their partner or dependent family members may still earn a family pension.

The family pension is equivalent to half of what the previous MP used to get.

Which Department is Responsible for Monitoring Salary Payments?

The Union Finance Department screens all cash contributions rendered to Members of Parliament. The central finance department monitors all charges.

You will receive a solid history of budgetary dispatches in separate accounts, regardless of whether it is the monthly payout of wages and allowances or the pension.

The compensation and remittance of MPs have been highly expanded as a result of the latest reforms.

This increased remuneration provides them with the much-needed boost to carry out their roles and obligations. The MPs are responsible for the constituency’s growth.

Indian Prime Minister’s Salary and Benefits

We all seem to be informed that the Indian Prime minister enjoys numerous offices and decent compensation.

The Prime Minister of India is the head of the Government, and simultaneously the Chief Advisor to the President of India, the Leader of the Council of Ministers, and the Leader of the lion’s share party in the Lok Sabha, as indicated by our Constitution.

He is the Leader of the State of India’s legislative body.

In any case, few people are informed of how much compensation and what offices are presented to the Prime Minister of India.

The Procedure Followed for the Prime Ministerial Election

According to the guidelines as mentioned in the Indian Constitution, the Prime Minister of India is appointed by the President of India, who nominates the party’s Leader with the lion’s share of the vote in the Lok Sabha as the Prime Minister of India.

Under a situation when no one party or coalition has a majority, the President appoints the Leader of the strongest party or alliance as Prime Minister. But even so, the PM must secure the parliamentary majority in the Lower House right on time as could be expected.

The Prime Minister may be chosen by either the Lok Sabha or the Rajya Sabha. When the PM is not a member of any House of Parliament, they must be voted to one within six months of being appointed.

He is the Leader of the House, of which he is a member, as the Prime Minister of the nation.

Prime Minister’s Term and Retirement Age

The Prime Minister, unlike the President, does not have a predetermined term of service. The Prime Minister’s overall tenure is five years, which matches the Lok Sabha’s running life period.

However, given the situation that he fails the vote of confidence in the Lower House, his term could end earlier. In this way, it tends to be said that he stays in power as long as he appreciates the confidence of the Lok Sabha.

Through official writing to the President, the Prime Minister can likewise make his resignation known.

The Prime Minister’s position has no specific term limits. In addition, there is no official retirement age as well.

Qualification Criteria to be Elected as the Prime Minister of India

To be qualified for the role of Prime Minister of India, an individual must:

  • The said person must have been a member of either the Lok Sabha or the Rajya Sabha.
  • An individual has to be a resident and citizen of India essentially.
  • Complete 25 years old in the event that he is an individual from the Lok Sabha or 30 years on the off chance that he is a Rajya Sabha part.

An individual cannot contest for the position of the Prime Minister of India if he holds any profit-making office under the Government of India, any state government, or any local or other authority is liable to the jurisdiction of any of the governments as mentioned earlier.

What is the Prime Minister of India’s Salary?

  • The Prime Minister is paid approximately Rs.19.2 lakh a year. His monthly wage is 1.60 lakh rupees.
  • Along with this, the PM is entitled to many of the government benefits and amenities. According to the RTI of 2013, the Prime Minister’s fixed allowance is 50 thousand rupees, the MP pension is 45 thousand rupees, and the special pay is 3000 rupees.

What Other Services is India’s Prime Minister Entitled To Enjoy?

  • Besides the salary given to the country’s Prime Minister, several other amenities are provided as well, such as 7 RCR’s luxury bungalow in Delhi known as the “Panchavati,” the unique protection limousine vehicle, security such as SPG, a private jet plane for official use and personal workers, so on and so forth.
  • Besides that, the Government of India also pays for the Prime Minister’s stay, lodging, and other travel-related interests while on an official tour or otherwise.
  • The prime minister drives the ministerial state sedan, which is a BMW 750i currently at the minute. In addition, when he has to fly to various countries or regions, he uses the official Air India aircraft reserved for him.

Pension Payment Benefit for the Prime Minister

  • The pension scheme provides free lodging so they will stay in for the rest of their life.
  • Even after they have resigned, they will have unrestricted admission to all trains in India. They will be able to fly to any place and at whatever point they need for the rest of their lives, as well as six business class domestic airline tickets for the first year.
  • For about the initial five years after their discharge, they will be assisted by a secretarial aide-de-camp of 14 individuals picked and funded by the Government.
  • However, the Vajpayee administration allowed both PV Narasimha Rao and Gujral to increase their staffing levels as appropriate.
  • In the wake of the completion of the very first five years, they will be given one personal secretary, a peon, and Rs.6000 every month to keep the office functioning.
  • They are registered for SPG security for the first year.

SPG’s overall budget in the year 2003 was Rs 75,000 crore, and it recruited over 3,000 employees.

The Lok Sabha subsequently passed the Special Protection Group (Amendment) Bill, which reduces the Prime Minister’s SPG protection for one year after retiring, i.e. the former prime minister would only have SPG security for one year.

How to Claim an Amount Using Form G On Death of PPF Account Holder

How to Claim an Amount Using Form G On Death of PPF Account Holder

Leave a Comment / EPF / By / November 28, 2023

How to Claim an Amount Using Form G On Death of PPF Account Holder: In case the subscriber of a Public Provident Fund or PPF dies. The money left in the account is automatically passed on to the nominee or nominees or the legal heirs after filing some paperwork. The paperwork and documentation will depend on whether the subscriber had appointed a nominee for a claim in the PPF account or not.

How to Claim an Amount Using Form G On Death of PPF Account Holder Overview

  • Form: The nominees or the legal heirs can register to submit a duly filled form called Form G to the bank or the post office where the deceased subscriber had held their account. Form G is crucial in this case and the Ministry of Finance.
  • Nomination Registered: If the deceased PPF subscriber had appointed a valid nomination, then the nominee only can claim the proceeds from the account. They need to fill the Form G along with the proof of death of the subscriber, i.e., their death certificate.
  • No Nomination Registered: If there are no nominations in force, the legal heirs of the deceased subscriber can claim to their account. They have to provide the death certificate, a succession certificate, or a letter of administration along with an attested copy of the probate will include that a competent court has issued.

How to Claim the PPF Amount If the Amount is up to Rs 1 Lakh

  • If the sum standing to the credit in the PPF account of a deceased subscriber or member had a claim up to Rs 1 lakh, then the claim can be processed after the heir submits the following documents.
  • A letter of indemnity
  • A letter of disclaimer on affidavit
  • An affidavit
  • A death certificate of the subscriber on stamped paper

How to Claim PPF Amount if the Nomination Details Do Not Exist And The Amount Is Less Than One Lakh?

If there are no existing nomination details or any legal evidence that people can produce to claim the amount, they can fill the annexure 1, 2 or 3 according to the PPF rule 12 (6) in Form G.

How to Go About the Process of Claiming the PPF Amount

  • The legal heir or the nominee has to provide the bank or the post office with the receipt of the application and other documents.
  • If the authorities find that all is in order, then the amount standing in the PPF account will be credited to the nominee or nominees from the PPF account of the deceased.
  • The nominee or the heirs have to fill up Form G, and they can download it online, or they can visit the bank or post office for the same.

The Form asks for information about the claim, such as the account number, the nominee details, the place, address, etc.

The Form G contains three annexures: Annexure 1, Annexure 2 and Annexure 3. The people who claim the amount have to produce the passbook of the original subscriber and the death certificate.

  • Annexure 1 contains Form G or the letter of indemnity that should be on stamped paper.
  • Annexure 2 includes the affidavit on stamped paper.
  • Lastly, Annexure 3 contains the letter of disclaimer on affidavit on stamped paper.

Therefore, all the annexures in Form G should be produced in stamp paper in front of a valid court. They also require the passbook of the deceased subscriber.

In case one of the nominees die, then the surviving nominee or nominees will have to provide the proof of death of the deceased nominee as well. The balance in the PPF account will continue to earn interest till the end of the month preceding the payments stopped depositing.

What Happens If A PPF Account Holder Or Subscriber Dies Before Fifteen Years Of The Investment Period Is Not Completed?

  • If the subscriber of a PPF account dies before completing fifteen years of investment, the successor can get part of the balance on demand.
  • However, if the nominee does not withdraw the balance, it will continue to earn tax-free interest. There are no partial PF withdrawals in this case.
  • Besides, it is risky to continue the account because they cannot appoint another nominee unless they have dissolved the account.
  • If there are multiple nominees, then they are the joint holders of the account. All of them have to apply for closure together.
  • Each of them will have to identify themselves to the concerning officer.
  • After they have completed all the formalities, the officer will issue a single cheque in favor of all of them.
  • They cannot encash it unless all the nominees have a joint account.
  • If there are no nominations assigned, then the balance will go to the legal heirs on the production of their succession certificate.
  • Hence, the legal heirs or the nominees should not continue it for the duration to be over because it is very risky. They should close the account after withdrawing whatever is available.
  • If they choose to leave the account open, then the excess amount that a person deposited after the original subscriber’s decease will not attract any interest. Rather, it will come back to them as it was.
  • The PPF account cannot be extended or transferred, but if the balance remains, it continues to have tax-free interest.
  • If there are no nomination details and they have a legal claim to the amount, then they need to fill the Form G if they are the legal heir.
  • They require the death certificate and the succession certificate.
  • If they don’t have the succession certificate, then they have to get an attested copy of the deceased subscriber, and it should be issued by a high court. They can also produce a letter of administration instead.
  • Along with these, they need the passbook of the subscriber.

How Long Will It Take To Process The Application?

In India, it is a long and tedious process. After one submits all the necessary documents pertaining to the claim of the PPF account, then the processing will take over a month at best. The P.F. settlement process may take somewhere from thirty to ninety days.

What Is The Distinction Between A Nominee And A Legal Heir?

According to our law, a nominee is not the owner of one’s investments. They are only the trustee of our assets in case of one’s death.

  • According to the succession law, they can distribute the money to the legal heirs according to one’s will.
  • The succession laws in India are varied according to the religion one’s faith. Hence, if they are Muslim, they will follow the Muslim rule, and if they are Hindu, they will follow the Hindu succession law, and so on.

How to Add or Change Nominee in the PPF Account?

If someone wants to change the registration or cancel the variation of nomination in the PPF account, they won’t have to bear any extra charges. People have to fill the form E to add the nominations in the PPF account. If they want to change the nomination details, then they can fill the Form F. They can download either Form from the bank or the post office’s site, and they can file it and update it after submission.

  • Fill up Form E or Form F.
  • Two witnesses have to sign it. The witnesses can be anyone, with or without your family relations.
  • Please submit it to the bank or the Post Office.
  • Make the people record the details of the new nominations in the passbook. You need to have both the nomination registration number and the nominee’s details in the passbook correctly.

You can wish to have more than one nominee for the account. If the nominees want to receive the payment, they will need to open a joint account to get it. They need a joint discharge application of withdrawal form or Form G at the time.

If the subscriber does not mention the nomination share for each of the nominees, then all of the nominees will get an equal share of the total amount after the subscriber’s death. Again, if a nominee forfeits their percentage of the amount after the owner’s demise, then the remaining nominee will get their payment in their account if they want. In such a case, the authorities should have the passbook. They will issue a notice to the remaining nominees with the information in the passbook. It is their responsibility to tell them about the payment they made to one or more nominees. They will call them to take their share and ask them about the availability of the passbook.

If undelivered, the passbook entered in the register will get disposed of like the passbooks in the deposit. It will get forwarded from the sub-office to the head office for safekeeping. In the case of P.O. savings account also, they follow a similar procedure.

Can We Claim the PPF Amount if the Nominee is a Minor?

  • If a minor is a nominee and the subscriber dies, then the person under eighteen becomes the subscriber.
  • The amount in the said account will not be payable on the death of the subscriber or parent because the PPF Act, section eight mentions that the sum is payable only after the subscriber’s demise.
  • The account hence remains operative, and no one needs to open another account.
  • If there is a surviving natural guardian or if the court appoints a competent guardian, then they can control the account after producing the necessary guardianship certificate.
  • If you have a PPF account, then you can make a maximum deduction of 1.5 Lakhs under rule 80C.

How to Download Form G?

If you want to download Form G because of the death of the subscriber who was related to you or you were the nominee, then you can go to the official site of the State Bank of India and download Form G in PDF format.

  • You can also search for it online, and you will get redirected to the State Bank of India page.
  • If the deceased subscriber had their PPF account in the post office, then you can go to the Post Office’s official site and download the form G in PDF format.
  • You will have to fill it and manually bring it to the bank or the post office for further processing. There is no process for filing it online.
  • Since the excess amount after the death of the PPF account holder does not add to any interest, it is better to withdraw it.
  • On the other hand, people related to the subscriber, i.e. the nominee or the legal heir, cannot extend the account.
  • Even if you want to convert it into a fixed deposit under the same statement, you cannot do it. Kindly talk to the bank manager or the authorities in the post office about the immediate removal of the money and dissolve the account.
  • We recommend you avoid the risk and hassle, but it is up to you.
  • Even if you have all the required documents, it takes months to process the amount. If there are any disputes, it might stretch longer.
Returns of NPS

Returns of NPS | Best NPS Pension Fund and Fund Manager

Leave a Comment / EPF / By / November 28, 2023

Returns of NPS: NPS or National Pension Scheme is a government-sponsored pension arrangement launched in January 2004 for government employees. It was opened for all sections in 2009. A subscriber can contribute continuously to a pension account during his or her working life, withdraw a part of the corpus in a lumpsum and utilize the remaining corpus to buy an annuity to secure a regular income even after retirement.

NPS doesn’t suffer a set or ensured return, but the profits are market-connected. Cash added to the NPS account can be put resources into up to 4 resource classes – values, corporate securities, government securities and elective resources through different annuity reserves. NPS accounts are of two sorts: Tier-I and Tier-II accounts. Note that the lone Tier 1 account of NPS offers charge allowances under various sections(not Tier 2). This article talks about the profits of NPS of other plans.

Which is the Best Asset for NPS?

  • Resource Class E: Investments in overwhelmingly value market instruments. The most extreme interest in this class is 75% of the complete commitment.
  • Resource Class C: interests in fixed pay instruments other than Government protections.
  • Resource Class G: interests in Government protections.
  • Resource Class A: puts resources into elective resources like Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InVITs). It is just offered in NPS Active Choice and as far as possible, putting resources into it is 5% of your corpus.

Best Funds for NPS

NPS Tier 1: HDFC Pension Fund, SBI Pension Fund ICICI Pension Fund deals with the most money(AUM). Based on returns, all assets are tantamount.

  • NPS Tier 1 Class E: HDFC Pension Fund leads.
  • NPS Tier 1 Class C: LIC Pension Fund, HDFC Pension Fund
  • NPS Tier 1 Class G: HDFC Pension Fund, SBI Pension Fund

NPS for Govt Employees

All in all, which store supervisor is the excellent Central Govt workers? All are dealing with a comparative measure of cash. Returns are equivalent, with SBI benefits store having a slight edge.

All in all, which reserve director is the excellent State Govt representative? All are dealing with a comparative measure of cash and giving equivalent returns. You have the alternative to change your speculation decision two times every year.

NPS Return Rate

NPS and NPS return go under the Pension Fund Regulatory and Development Authority (PFRDA). It is overseen by NPS annuity store chiefs who are answerable for NPS returns. NPS reserves apportion interests in 4 distinctive resource classes: value, corporate securities, government securities, and elective resources. Financial backers can pick NPS annuity store supervisors to deal with their speculation.

The measure of National Pension System returns relies on the presentation of the plan you put resources into. NPS doesn’t ensure a fixed return. All things being equal, returns depend upon the market execution of the projects you put resources into. Along these lines, the prior you start putting resources into NPS, the higher your retirement corpus and annuity sums will be.

NPS Return in Tier 1

Asset Classes 1-year Returns(%)* 5-year Returns(%)* 10-year Returns(%)*
Equity 15.33%-18.81% 13.11%-15.72% 10.45%-10.86%
Corporate Bonds 12.46%-14.47% 9.27%-10.15% 10.05%-10.64%
Government Bonds 12.95%-14.26% 10.29%-10.88% 9.57%-10.05%
Alternative Assets 3.98%-16.73% NA NA

NPS return in Tier 2

Asset Classes 1-year Returns(%)* 5-year Returns(%)* 10-year Returns(%)*
Equity 15.19%-17.92% 13.05%-15.83% 10.35%-10.58%
Corporate Bonds 12.71%-16.36% 9.55%-10.17% 9.86%-10.60%
Government Bonds 12.61%-13.42% 10.40%-12.00% 9.59%-10.07%

NPS Returns in Other Pension Schemes

Aside from NPS, other retirement venture plans accessible in the market can likewise be utilized to get your monetary goals post-retirement. These are offered by various financial organizations, for example, banks and insurance agencies like the Life Insurance Corporation of India. In contrast with NPS, here are the highlights of other annuity plans on the lookout:

Pension Plan Age Limit (Years) Minimum Contribution Per Annum Tax Benefits Flexibility
NPS 18-65 ₹10,000 Investment Up to two lakhs Indian currency eligible for tax deductions Locked-in until sixty; partial withdrawals permitted after ten years
Public Provident Fund Minimum 18; No upper limit. ₹5,000 Investment up to 1.5 lakhs INR deductible under Sec.80C Lock-in period of fifteen years; partial withdrawal allowed after five years.
Whole Life Unit-Linked Plan 18-69 Single pay may start at ₹12,000 Premiums up to INR 1.5 lakhs deductible under Sec. 80C Lock-in period of five years and there is partial withdrawal possible
Regular Pension Plans 18-60 ₹18,000 – ₹24,000 Premiums up to 1.5 lakhs INR deductible under Sec. 80C Lock-in period of fifteen years, and eligible for a loan against the policy

How NPS Aids in Saving Tax

NPS assists in keeping Tax in 3 ways:

  • Sec 80CCE: Rs 1.5 Lakh (alongside 80C)
  • Sec 80CCD(1B): Rs 50,000 (well beyond 1.5 lakh) which helps you in saving 15,600 Rs.
  • Sec 80CCD(2D): 10% of Basic for corporate

The Pension Fund Managers

As of now, there are eight annuity reserve supervisors in the country.

  • Aditya Birla Sun Life Pension Management Limited.
  • SBI Pension Funds Private Limited.
  • HDFC Pension Management Company Limited.
  • Dependence Pension Fund.
  • UTI Retirement Solutions Limited.
  • LIC Pension Fund.
  • ICICI Prudential Pension Funds Management Company Limited.
  • Kotak Mahindra Pension Fund Limited.

SBI Pension Fund, LIC Pension Fund, and UTI Retirement Solutions are the solitary asset administrators who oversee annuity commitments of government representatives under NPS.

You have options to choose scheme preference for the rest of all investors

  • Active choice – You settle on the resource classes in which the contributed reserves are to be donated and their rates (Asset class E-Maximum of 75%, Asset Class C, and Asset Class G ).
  • Auto choice – Lifecycle Fund–This is the default alternative under NPS and wherein the administration of venture of assets is done naturally depending on the endorser’s age profile. There are three sorts of Auto decisions.

Aggressive, Conservative, and Moderate, which contrasts the sum of resources into value.

  • At 18 years old, the auto decision will put resources into various resource classes with the most excellent Equity.
  • From age a day and a half, the load in E resource class will diminish yearly, and the weight in C and G class will increment every year.

See the table underneath for resource designation in every lifecycle reserve:


Aggressive		 Conservative Moderate
Age E C G E C G E C G
Up to 35 years 75% 10% 15% 25% 45% 30% 50% 30% 20%
40 55% 15% 30% 20% 35% 45% 40% 25% 35%
45 35% 20% 45% 15% 25% 60% 30% 20% 50%
50 20% 20% 60% 10% 15% 75% 20% 15% 65%
55 15% 10% 75% 5% 5% 90% 10% 10% 80%
Asset Class E = Equity C= Corporate Bonds G= Government Bonds

NPS Tier 1

SBI pension fund, HDFC Pension Fund, ICICI Pension Fund manage the most money (AUM)

  • NPS Tier 1 Class E: Based on the returns, HDFC Pension Fund leads.
  • NPS Tier 1 Class C: All funds are comparable.
  • NPS Tier 1 Class G: Based on returns, LIC Pension Fund leads, followed by HDFC Pension Fund.

The Best Fund Manager of NPS for Government Workers

The Government worker NPS records and commitments are overseen by LIC Pension Fund, SBI Pension Fund and UTI Pension. For Govt workers, up to 15% of the corpus must be put resources into Equity Fund. The leftover corpus is allotted to Corporate Bonds and Govt protections.

Anyway, which reserve chief is the best Central Govt representative? All are dealing with a comparable measure of cash. Returns are similar, with SBI benefits store having a slight edge.

Anyway, which reserve supervisor is the excellent State Govt representative? All are dealing with a comparable measure of cash.

Negatives of Investment in NPS

  • Liquidity is one of the significant aspects of any speculation. In NPS, you won’t pull out until the age of 60, aside from contracting an actual sickness or purchasing or building a house.
  • The whole revenue stream from the NPS, the single amount, and the benefits are entirely available, except the bit used to buy the annuity. Moreover, annuity payouts, i.e. services, are additionally wholly available. Contrasting this and interests in value and value common supports that are excluded from the drawn-out capital increases charge in any event. The PPF additionally doesn’t endure any expense on withdrawals.
  • The most exceedingly terrible condition is the point at which you pull out after the age of 60; 40% of that corpus must be obligatorily used to buy an annuity from an extra security organization. However, assuming withdrawal is made before that, a faltering 80% of the aggregated capital should mandatorily be utilized to purchase a daily existence annuity. The record holder can use the equilibrium of 20% for any reason. Annuities are a significant expense, low-return results of different security organizations, superb for the specialists and organizations that sell them.
  • In any event, for seemingly forever skyline, a limit of just half designation to value is allowed, regardless of whether the financial backer needs a higher value assignment.
  • While much is made of the low asset the board charge, there are staggered charges at different workplaces and levels of the NPS framework, the total impact of which make the NPS is an undeniably more costly framework than shows up from the outset.

FAQ’s on NPS

Question 1.
Is NPS return guaranteed?

Answer:
No, NPS returns are not guaranteed as they are linked to the market and depend upon the scheme’s performance.

Question 2.
How is NPS return evaluated?

Answer:
NPS returns are evaluated based on the amount invested, the duration of the investment, and the scheme’s performance. There is an NPS calculator available for computing returns.

Question 3.
What does it refer to if NPS returns are negative? Should the subscriber pay a negative amount?

Answer:
NPS is a long-term investment product. It should be treated like a SIP. Volatility in the market might lead to negative returns in the short term, but it will not impact the long-term investment product. A subscriber will not be needed to compensate for negative returns.

Question 4.
Does NPS give better returns than mutual funds in the long term?

Answer:
Both mutual funds and NPS returns are linked to the market. The return depends on the pension fund program manager, amount of investment, asset allocation and duration of the investment. Still, the cost of investing in NPS is minimal, translating into considerable returns for the long term.

EPF New Composite Claim Forms for Full and Partial Withdrawal Aadhar and Non-Aadhar Based

EPF New Composite Claim Forms for Full and Partial Withdrawal Aadhar and Non-Aadhar Based

Leave a Comment / EPF / By / November 28, 2023

EPF New Composite Claim Forms for Full and Partial Withdrawal Aadhar and Non-Aadhar Based: EPFO lately launched the EPF Composite Claim Form. This is a particular form for all kinds of withdrawal (including partial or advance withdrawal) with or without the employer’s signature.

Last year, EPFO formed the UAN based EPS and EPF withdrawal forms to simplify the method (New EPF Withdrawal Forms-Withdraw without employer signature). To simplify the process, now the particular single form is introduced as EPF Composite Claim Form.

This will replace the existing Form 31, Forms 19, and Form 10C. Form 19 is used for EPF final agreement, Form 31 is used for EPF partial withdrawal, and Form 10C is used for EPS withdrawal. Are affirmed for PF Final Settlement, EPS Pension.

The EPFO’s New EPF Composite Claim Forms

On Feb 20, 2017, EPFO (Employees’ Provident Fund Organisation) had introduced an Aadhar based and Non-Aadhar established Composite PF Claim Forms, which substitutes existing Forms No. 19, 19 (UAN), 10C, 31, 10C (UAN) and 31 (UAN). This is simply the form for claiming the full and partial withdrawal from the EPF.

It has done away with two separate forms for Full Withdrawl, claiming EPS (Form 10C) and EPF(Form 19). So now individual form can be used, which will withdraw from both EPS and EPF.

There are two variants of the form Aadhar based form and Non-Aadhar based Forms.

  1. Aadhar Based Full Withdrawal Forms: These forms are relevant in cases where an employee’s Bank Accounts and Aadhaar Number details are available on UAN Portal, and UAN has been initiated. So an individual can withdraw by submitting these forms straight to EPFO without the attestation of the Employer. These forms were earlier called as UAN-Based Forms.
  2. Non-Aadhar Based Full Withdrawal Forms: These forms can be practised when Aadhar has not been added with UAN. So one needs to get the attestation of the employer, and then the employer will submit the Full Withdrawal form to EPFO. But even in these forms, a person is required to provide the Aadhaar number.

New Partial Withdrawl Form: Earlier, an individual had to submit Form 31, called EPF Advance Form or EPF Withdrawal, through the Employer for partial withdrawal from EPF after placing in at least five years of service for Treatment, Marriage / Education, Purchase or construction of Dwelling house. Form31 of EPF for partial withdrawal was 3-4 pages long-drawn and required revenue stamp and proof. EPFO made it 1 page and has dismissed the submission of documents. So now it is just like a form for complete withdrawal.

EPF New Aadhar Composite Claim Forms

The New EPF Composite Claim Form Aadhar based for Withdrawal/Partial Withdrawal needs minimal information. It needs the following information:

  • Name
  • UAN number
  • Aadhar Number
  • Claim applied for Final PF Settlement/Pension Withdrawal/PF Partial Withdrawal.
  • The establishment joining date
  • Date of leaving the service for complete withdrawal.
  • The reason behind quitting the service
  • Full postal address
  • Only signature of the Member
  • Purpose and Amount for partial Withdrawal
  • PAN details.

EPF New Non-Aadhar Composite Claim Forms

The New EPF Composite Claim Form for Non-Aadhar based, which requires attestation and more information from the employer. It requires the following lead. Few information is highlighted as they are extra information than the Aadhar based form.

  • Name
  • UAN number/PF number if UAN is not available.
  • Aadhar Number (for seeding)
  • Claim applied for PF Partial Withdrawal/Final PF Settlement/Pension Withdrawal.
  • Father’s Name, Husband’s name
  • Date of Birth
  • The establishment joining date
  • PAN details
  • The purpose for leaving service
  • Purpose and Amount for partial Withdrawal
  • Only signature of the Member
  • Signature of the Employer
  • Details of Bank
  • Full postal address of the applicant

Difference Between Non-Aadhar Based and Aadhar Based EPF New Composite Claim Forms by EPFO

If one looks at the difference between Non-Aadhar based and Aadhar based EPFO’s New Composite Forms, they will surely notice that more information is required for Non-Aadhar based EPFO’s Composite Form.

Standard Information in both the forms:

Name of the member, Full postal address, Reason of leaving service for Full Withdrawal, Date of Joining the establishment, PAN number, and Full postal address, Purpose for Partial Withdrawal, and Extra information required for New Composite Claim Form based on Non-Aadhar is as follows. A person is allowed to submit the PF number if the UAN number is not available(only for those who served before Oct 2014). Require Date of Birth, Bank Details, Employer’s signature, Father’s name, and Husband’s name.

Earlier EPF Forms for Withdrawal and Partial Withdrawal which are substituted by EPF Full Withdrawal Forms

One can easily withdraw from EPS and EPF if the individuals are unemployed for two months. A person can also wait for two months to get a new job, and then they can get their PF Account transferred to the new account of the employee.

EPF had introduced 1-page simple Non-UAN Based as well as UAN Based EPF Forms which an individual could use to submit claim forms directly to EPFO without the attestation of employers if they had given/seeded bank account details and Aadhaar with their UAN, which have the facility to by favouring claims in Forms 31(UAN), 19 (UAN), and 10C (UAN) EPF UAN based forms.

EPF UAN-Based Withdrawals Form 19: In order to avoid TDS deduction if your service is less than five years, please do submit Form 15G.

EPF UAN-Based Withdrawals Form 10C: (note that EPS withdrawal is only permitted if the individual has not completed service of ten years.)

Claiming Loan or Advance from EPF: UAN-Based_Form31

Partial Withdrawal EPF Forms

Any Individual had to submit Form 31, called EPF Advance Form or EPF Withdrawal, for partial withdrawal from EPF through the Employer, after establishing at least five years of service for Treatment, Purchase or construction of Dwelling house and Marriage / Education.

With the application of the EPF Partial Withdrawal Form, an individual has to submit proof of why they want the partial withdrawal. For example, for Partial Withdrawal for Medical treatment Certificate from the doctor affirming the hospitalization requirement. In case of any of the diseases mentioned above, a certificate from a specialist doctor.

For Partial withdrawal for education, the person requires to submit a Bonafide Certificate duly symbolising the fees payable from the educational institution. For Partial Withdrawal for marriage, the individual is required to submit a Marriage card.

EPS Pension Form 10D

EPS Pension Form 10D | How To Fill The Form 10D for Claiming EPS Pension?

Leave a Comment / EPF / By / November 24, 2023

EPS Pension Form 10D: Any new employee who has been registered under the Employees Provident Fund Organization is automatically going to be enrolled for the Employee’s Pension Scheme (EPS). Under this scheme, all the members are eligible for opting for pension claims after their retirement at 58 years. However, an employee can apply for a reduced pension after 50 years, given at a discounted rate of 4% every year.

The members are eligible to apply for a monthly pension by filling the EPF Form 10D. The amount of pension of a person depends on their monthly pensionable salary and total pensionable service. Let us look at the overview of EPS Contribution, Pension from EPS, how to fill EPS Pension Form 10D to Claim your Pension from EPS.

The government launched the EPF pension scheme in 1995 and is also called the Employees’ Pension Scheme 1995. It includes both the new as well as the existing EPF members. The EPS pension scheme has specific arrangements in place when an employee is willing to withdraw pension funds.

Overview of the Pension from EPS

Employees’ Pension Scheme (EPS) provides widow pension, pension on disablement, and pension for nominees. In 1995 the Family Pension Scheme (FPS) was replaced by EPF.

When an employee joins a new establishment registered under the Employees Provident Funds & the Miscellaneous Provision Act, 1952 (s), he becomes an Employees Provident Fund Scheme (EPF) and Employees’ Pension Scheme (EPS) member.

Eligibility Criteria for EPS

To avail of the pension benefits under the Employee Pension Scheme (EPS), the employees must meet the following eligibility conditions. The individual should:

  • Be an EPFO member: Completed ten years of active service as well as an equal number of years of active contribution towards the EPF pension Scheme.
  • Be 58 years or above: Have attained at least 50 years for withdrawing from the EPS pension at a lower rate.

Delay the withdrawing process of the pension for two years, i.e., till he or she is 60 years, to become eligible to get EPS pension at a rate of 4% annually

EPS Contribution, The Transfer of EPF and The Withdrawal from EPF/EPS

EPS Contribution

  • EPS applies to all the members who joined EPF after 15.11.1995
  • 33% of the employer’s monthly contribution to the EPF goes to EPS.
  • The monthly contribution to the EPS is restricted at 8.33% of Rs. 15000 or Rs 1250 p.m.
  • Unlike the EPF contribution, the EPS part does NOT get any interest.
  • On attaining 58 Years, an EPF member automatically ceases to be a member of EPS.
  • From 25 April 2016, one can defer pension up to 60 years with/without contribution.

Who is Eligible for Claiming Pension By EPF Form 10D

Any of the following are eligible for claiming the pension:

  • The Employee
  • Nominee
  • Widow or Widower
  • Guardian
  • Dependent Parent
  • Major or Orphan

How to Fill The EPF Form 10D

Firstly, the form 10D EPF can only be filled offline. The member needs to mention the following details in the form:

By whom the pension is being claimed under: this field, the applicant needs to mention any one of the following (as stated above)

  • The Member
  • Nominee
  • Widow or Widower
  • Guardian
  • Dependent Parent
  • Major or Orphan

Types of Pension Claimed

Following are the types of pensions that the inheritor can avail:

  • Superannuation Pension– This pension can be claimed for the monthly pension after the retirement of the employee at the age of 58 years
  • Reduced Pension– This pension is nothing but the monthly pension at a discounted rate of 4% per annum, which can be claimed for 50 years.
  • Disablement Pension– This pension can be claimed as an early monthly pension amount if there is permanent and total disablement.
  • Widow and Children’s Pension– This pension can be claimed for the monthly pension for the wife and children after the member’s death.
  • Orphan Pension – This pension can be claimed for the monthly pension benefits for the surviving sons/daughters of the deceased member up to age 25 years.
  • Nominee Pension– This pension can be claimed for the monthly pension to the nominee declared after the death of the employee if there are no other family members.
  • Dependent Parent– The monthly pension for dependent parents can be claimed if the employee dies without a family (spouse and children) or any nominee.

Member Details

In this field, one will be asked to fill in the following details:

  • Name of the member
  • Gender
  • Date of birth/age
  • Marital status
  • Father’s/Husband’s Name

EPF Account Details

  • Office
  • RO
  • Member’s Account Number
  • Establishment Code

Name & address of Establishment in which the employee was last employed: Enter the name and address of the company you were working for before joining.

Date of resigned the service (dd/mm/yyyy): Mention your last working day in the previous organization.

State reason for leaving the service: If total and permanent disablement was the reason for leaving service, only the member is entitled to Disablement Pension. In all the other cases, the actual reason for leaving service might be provided.

Address of communication:Provide your permanent address for any kind of communication.

In the case of reduced pension (opted date for commencement of the pension): In case the employee has worked for less than 58 years of age and has not completed the time period as on the date of application and is ready for drawing a reduced pension, he/she has to mention the pension beginning date.

Option for the commutation of 1/3 of Pension: Commutation is the option to receive the capital sum in one go instead of receiving a monthly pension for the rest of your life for a retiring member. He or she can get nearly 30% of their pension corpus in one go and draw a monthly pension from their remaining corpus.

Option for the Return of Capital: Tick the option if you want to withdraw the entire amount of pension in one go.

Mention the nominee for Return of Capital: Mention the nominee’s name you want to collect his/her pension in case of the employee’s death.

Particulars of Family: Mention family details; in case of the death of the employee, his/her family are entitled to the amount of pension.

Date of the death of the employee (if applicable): This field is applicable only if the member has passed away. Supporting the date of death, a death certificate has to be produced.

Details about the Bank Accounts Opened

  • Name of the Bank (in which there is the account)
  • Name of the Branch (where you have the account)
  • Full Postal Address/ Pin code

Detail about the Scheme Certificate, which is already in possession of the employee, if any.

If the Scheme Certificate is received, indicate:

  • Scheme Certificate Control No.
  • The authority who issued the Scheme Certificate

If the pension is being drawn under the E.P.S, 1995, mention

  • The PPO number and
  • The Issuer RO/SRO

Documents enclosed (Indicate according to the instructions.)

The applicant needs to verify the details by signing the form and getting signed by the employer.

Filling the form is a long process as the EPF form 10D is not available on any online filling facility.

What Happens If You Resign Before Completing Ten Years Of Service?

For the EPS, if the service time period is less than ten years, you have the option to either withdraw your corpus or get it transferred by obtaining a ‘Scheme Certificate’. Once the service period crosses ten years, the withdrawal option ceases.

  • If you resign before completing nine years and six months of service, you get the withdrawal benefit which depends on your monthly salary and years of service. EPS every time rounds up the number of years. So, if you worked for four years and seven months, it will be considered five years.
  • A member who has completed 58 years of service or claimant on behalf of the deceased member who passed after 58 years without completing their eligible service of 10 years need to apply for Withdrawal Benefit via Form 10C.

What Happens To A Pension When You Transfer A Job?

EPS and EPF are not technically linked. You can withdraw the EPF once you have left the organization after filing Form 19. However, when you transfer the EPF via EPF Form 13, the EPS is also going to be transferred. Its amount is not going to be reflected in the passbook. But the period of transfer is recorded.

What are the Required Documents for Enclosing with EPF Form 10D?

  • Descriptive role of pensioner and their specimen, i.e., signature or thumb impression (duplicate) (This Form is enclosed with the Claim Form).
  • In case the member has a permanent and total disablement, they must undergo a complete medical examination by the Medical Board appointed by the EPFO. These relevant documents then need to be duly attached with the form.
  • Three Passport size photographs
  • The establishment has to compulsorily mention the certificate and salary particulars of the member during the time of retirement/demise.
  • In case the establishment is closed and no other authorized officer has been appointed, the application has to be forwarded via anyone from the list of the gazette officer, magistrate, bank manager or any other authorized officer who may be approved by the Commissioner.

How Long is the Pension Available?

A lifelong pension is available to the employee. Upon their death, members of the family are entitled to the pension. Family including employees’ spouse and children below the age of 25.

  • In the case of a family death, pension is payable to first the spouse and second two children below the age of 25. When an individual reaches the age of 25 years, the third child below 25 years of age will be given a pension and so on.
  • If the children are disabled, he may get a pension till his death.
  • In any case, only two children will receive a pension amount at a time.
  • If an employee does not have a family, a pension is payable to a single nominated person by the employee themselves. One is allowed to change one nomination anytime within the framework of rules for these nominations. In other words, if one has family, the nomination must be in favour of a member(s) of their family. However, in case they have no family, they can nominate anyone they wish.
  • If not nominated and they have a dependent parent, pension is payable first to Father and then on father’s death to Mother.
  • One can apply for the EPS Pension from any date immediately following the date of completion of the 58 years of age, notwithstanding with the fact that the person has retired or ceased to be in employment prior to that date.
  • Pension will be depending on the number of years of your service.
  • Maximum Pension one can get Rs 7,500 per month.
  • The Government has since Sep 2014 implemented a minimum pension of Rs. 1000 each month to the member/ parent/disabled/widow/widower/nominee pensioners and Rs. 250 each month for children’s pensioners and Rs. 750 each month to the orphan pensioners.
  • The EPFO has also decided to suspend the enhanced pension payment to the widows, children and the orphans under this scheme. Under the modified version of the scheme, the minimum pension per month for widows has been fixed at the amount of Rs 1,000, and for children has been fixed at the amount of Rs 250. Similarly, the minimum pension entitlement for the orphan pensioners has been fixed at the amount of Rs 750 per month.
  • The maximum service for calculation of service is 35 years.
  • Fraction of service for six or more months is going to be treated as one year, and the service for less than six months shall be ignored. So, nine years and six months will be rounded up to 10 years.
  • If no salary is earned for a certain period of time, that period is going to be deducted from the service, as there will be no contribution to the Pension Fund.
  • No pensioner will receive more than one EPF Pension. Hence if you have worked in multiple organizations, you need to consolidate all your EPS and apply for the EPS Pension. If you have multiple Scheme Certificates, you have to submit all of those.
  • EPS Pension is taxable and needs to be considered under the head Income from the Salaries.

Applying for The EPS Pension

How to apply for an EPS pension?

  • For pension, EPS Pension Form 10D needs to be filled.
  • The application (given an overview above) should be forwarded through the establishment in which the employee last served when they passed away. The establishment needs to furnish the certificate and salary particulars duly attested by the authorized officer.
  • In case the establishment is not open, then the application has to be forwarded via the Gazetted Officer/Bank Manager/Magistrate, any other authorized officer who has been approved by the Commissioner.
  • With Form 10D, one will be required to attach the bank account proof [copy of passbook/cancelled cheque]. For this, one needs to have an account in the bank, which EPFO designates for the pension facility. For the details of such a bank, one can visit their nearby EPFO.
  • Photographs of one’s family, including them, their spouse and children below the age of 25 yrs. Previously EPFO asks for three photographs, but now they are taking four photographs.
  • Age proof of the members of family, as in the picture.
  • Any scheme certificate issued before by any EPFO.
  • Your employer or any gazetted officer should attest to all the above documents and form.
  • The form must be submitted in duplicate in case of home state and triplicate in case of out of state.

How Much Time Does It Take To Get The Pension?

The claims, completed in all respects submitted with the required documents, will be settled, and the benefit amount is going to be paid to the inheritor within thirty days from the date of its receipt by the Commissioner. Suppose there is any deficiency in the claim. In that case, the same is going to be recorded in writing and communicated to the applicant within thirty days from the date of receipt of such application.

Suppose the Commissioner fails without sufficient cause to settle a claim complete in all respects within thirty days. In that case, the Commissioner shall be liable for the delay beyond the said time period and penal interest @ 12% per annum may be charged on the benefit amount.

The same might be deducted from the salary of the Commissioner.] 40. Ins. by GSR 376 on date 27th October 1997 (w.e.f. 8th November 1997)

Commutation and Return of the Capital of The EPS Pension Form 10D

The Commutation and the Return of Capital on superannuation have been discontinued since 26th September 2008 (Notification Number GSR 688 (E) dated on 26th September 2008) in an attempt of curbing the EPS deficit.

So fill Slot No.9, 10 and 11 of the form only when the date of start of member pension is before 26/09/2008 (cases where the application is being filed belatedly but the member is due for a pension from such date)

Under the commutation of the pension scheme, a retiring employee had an option to receive nearly 30% of their pension corpus in one go and draw a monthly pension from their remaining corpus. Commutation is the option for receiving a capital sum that day instead of receiving a monthly pension for the rest of your life. The rate of commutation is up to 1/3rd of the Original Pension.

For instance, the original pension is Rs. 600, and the commutation value is Rs.20,000. On commutation, the payable pension amount will be Rs. 400,

Return of capital on the superannuation was the option for cashing out the entire pension corpus, i.e., Members had the option to get one-time cash by preceding their monthly pension.

Family Details in EPS Pension Form 10D

As mentioned earlier in the article, a lifelong pension is available to the employee. Upon their demise, members of the family are entitled to the pension. This section talks about details of the family members. While the employee’s pension is approved, the pension amount paid to the family (spouse/children) is also decided.

If the member’s death as a pensioner, the spouse/children/orphan will start getting the pension on submission of the death certificate. There will not be any required processing of the widow/children/orphan pension again. In the case of a deceased employee, it has to be filled by the spouse or the children.

The list of the family members of the employee, including their spouse, all the children, has to be furnished. The particulars of Guardian have to be given in respect of every minor as of the date of application. Supporting the age of children, age proof certificate obtained from the school or Registrar of Birth-death or E.S.I. Record or Municipal authorities should be enclosed. In case there is a Guardian other than a natural guardian, a Guardianship Certificate should be held.

Date of Death of employee (if applicable)

Applicable only if the member is has passed away. In support of the date of death, a death certificate has to be enclosed.

Bank Details for the EPS Pension in EPS Pension Form 10D

Pension is payable through any bank branch depending on where the pensioner wants to receive the pension. Therefore Savings Bank Accounts has to be opened only in the said Bank(s) (listed below). The employee, the spouse and children (minor or significant) should also open S.B. A/cs in the same branch of the Bank.

In case the claim is preferred by the spouse, he/ she should give his/her S.B.A/c No. and separate S.B.A/c No.s in respect of every child. S.B. A/c No.s of the children below the age of 25 years (as on date of death of the member) should be given. On behalf of the minor child, S.B. A/c opened in the name of minor and operated by the guardian of the minors and A/c No. should be given.

Whenever the pension has been opted from a place beyond the jurisdiction of the region in which the employee was last employed, he/she should ascertain the name of the designated bank which is applicable in that Region and open an S.B. A/C therein. On sanction of the Pension, intimation will be sent to the pensioner for contacting the bank.

List of the Banks Where One Can Get EPS Pension

List of the Banks in which provision has been made for the retired members drawing pension under the Employees’ Provident Fund Organisation (EPFO) according to the Press Information Bureau August 2015 is given below:

Serial Number EPFO Regional Office Pension Disbursing Banks
1. Delhi SBI, PNB, UBI, IB, ICICI, HDFC, AXIS
2. Dehradun SBI, PNB
3. Gurgaon PNB, HDFC, SBI, AXIS, ICICI
4. Faridabad SBI, PNB, ICICI, HDFC, AXIS
5. Jaipur HDFC, PNB, Thar Gramin Bank, AXIS, ICICI, SBBJ
6. Shimla SBI, AXIS, PNB
7. Ludhiana SBI, PNB, AXIS, HDFC
8. Chandigarh SBI, HDFC, PNB, AXIS, ICICI
9. Bihar BOI, PNB, HDFC
10. Meerut SBI, PNB
11. Kanpur SBI, PNB, ICICI, AXIS, HDFC
12. Hyderabad UBI, SBI, AXIS, HDFC, AB, ICICI
13. Guntur HDFC, AB, SBI, ICICI, AXIS
14. Nizamabad Gramin BANK, UBI AB, SBI, SY,
15. Bhuvneshwar UCO Bank, BOI, SBI, ICICI, AXIS, HDFC
16. Bangalore CANARA, SBI, SY. BANK, VIJAYA BANK, CORPORATE BANK, ICICI, HDFC, AXIS
17. Goa BOI, SBI, HDFC
18. Gulbarga CANARA, SBI, CORP. BANK, SY. BANK
19. Mangalore ICICI, SY. BANK, SBI, CANARA, AXIS, VIJAYA BANK
20. Peenya HDFC, AXIS, CANARA BANK, SBI, CORP BANK, SY. BANK
21. Coimbatore IOB, HDFC, AXIS, SBI, ICICI, IB
22. Kerala North Malabar Gramin Bank, IB, SBI, CANARA, SY. BANK, FED. BANK, AXIS, HDFC, SBT, ICICI, IOB, PNB
23. Madurai IOB, SBI, IB, ICICI, HDFC, AXIS
24. Tambram IOB, SBI, IB, ICICI, HDFC, AXIS
25. Chennai IOB, SBI, IB, ICICI, HDFC, AXIS
26. Ranchi AXIS, PNB, ICICI, UBI, CBI, UCO
27. Jalpaiguri UBKG BANK, UBI, UCO, SBI, CBI
28. Kolkata HDFC, PNB, ICICI, AXIS, UBI
29. Guwahati ICICI, SBI, HDFC, AXIS
30. Raipur CBI, HDFC, ICICI, PNB, SBI, AXIS
31. Bandra IB, PNB, AXIS, ICICI, BOI, HDFC, BOM, SBI
32. Thane AXIS, HDFC, BOI, PNB, SBI, ICICI
33. Kandavali ICICI, PNB, BOI, SBI, AXIS, HDFC
34. Pune BOM, SBI, PNB, BOI, AXIS, ICICI, BOM
35. Nagpur SBI, HDFC, BOI, PNB, ICICI, AXIS
36. Surat DENA, AXIS, ICICI, SBI, HDFC
37. Ahemdabad HDFC, DENA, SBI
38. Vadodara HDFC, DENA, SBI
39. Indore HDFC, PNB, AXIS, ICIC, SBI

Nomination Details and Scheme Certificates in the EPS Pension Form 10D

If the employee passes away before reaching the age of 58 years without leaving any family members for receiving the pension, then the nominee appointed by the member via the Form 2 (Revised) already sent to the P.F. Office might apply, giving his particulars against this column.

If the employee had no family and had died before appointing a nominee for pension, his/her dependent parent (father & mother) may apply for a pension. The pension will be paid to the father and his demise to the mother.

As mentioned earlier in the article, For EPS, if the service period is less than ten years, you have the option to either withdraw your corpus or get it transferred by obtaining a ‘Scheme Certificate’. If you have received a Scheme Certificate, then you have to enter the details.

If pension is being drawn under the E.P.S, 1995 In case the applicant is already receiving a pension under the Employees’ Pension Scheme, 1995 claim pension, then the details must be furnished.

List of that Documents That Must Be Submitted with the EPS Pension Form 10D

List of the documents to be enclosed along with the EPS Pension Form 10D

  • A descriptive role of pensioner and his/her specimen signature/Thumb impression (in duplicate); (Form is held with the Claim Form)
  • Photographs: The employer of the establishment of the authorized official needs to attested the pictures, indicating the person to who the photograph relates and also the P.F. Account No. of the member, written in the verse and then placed in a separate envelope.
  • Three passport-sized photographs If claimed by the member Joint photo with spouse, there is no need to send a photograph of the children.
  • If claimed by widow/widower, the picture must be sent for widow/widower and his/her two children (below the age of 25 years) separately.
  • If a member, who is permanently and disabled during the employment, he/she has to undergo a Medical Examination before the Medical Board appointed by the E.P.F. Office. But the disablement must occur while still in employment.
  • Cancelled cheque from the Bank where one is willing to receive the Pension.

Employer Approval in the EPS Pension Form 10D

The application must be forwarded through the establishment in which the employee last served before he/she passed away. The establishment must furnish the certificate and salary particulars duly attested by the authorized officer.

Meaning of Relative for Section 56(2)

Meaning of Relative for Section 56(2)

Leave a Comment / Finance / By / November 24, 2023

Meaning of Relative for Section 56(2): The gift is something we prefer to get from our adored ones, yet are we mindful about the assessment suggestions on the equivalent. Under Income Tax Act 1961, there are numerous standards on accepting blessings dependent on the idea of the blessing and from whom the individual has gotten the gift.

This article gives a rundown of family members covered in Section 56(2)(VII) of the Income Tax Act,1961. According to Section 56(2)(VII), if any gift from relative who are covered under after rundown will be excluded from the collector’s possession.

Anyway, the meaning of the term ‘Relative’, which is given in the first clarification to the stipulation to area 56(2)(VII), is extremely wide on its own.

According to the Income charge act, the expression “family members” is portrayed in detail. As gift got as money, cheque or great from your relative is wholly excluded from the charge. So if you get cash from any of your family members recorded underneath, you are not responsible for paying any expense on something very similar.

Gifts Received From Relatives

  • Father or Mother of the person
  • Sibling or Sister of the person
  • Child or little girl of the person
  • Fantastic child or Grand girl of the person
  • A mate of the individual, i.e. spouse or wife of the person
  • Sister’s Husband or Brother’s Wife of the person
  • Sibling or Sister of the life partner (Wife) of the person
  • Sibling or Sister of the mate (Husband) of the person
  • Sibling or Sister of the Mother of the person
  • Mother’s Sister’s Husband of the person
  • Spouse’s sibling’s significant other of the person.
  • Father’s Brother of the person
  • Father’s Brother’s Wife of the person
  • Father’s Sister’s Husband of the person
  • Father’s Sister of the person
  • Granddad or Grand Mother of the person
  • Incredible Grand Father or Great Grand Mother of the person
  • Little girl’s Husband of the person
  • Child’s wife of the person
  • Spouse’s Father or Wife’s Mother of the person
  • Spouse’s Father or Husband’s Mother of the person
  • Spouse’s Grand Father of the person
  • Spouse’s Grand Mother of the person
  • Spouse’s Grand Father of the person
  • Spouse’s Grand Mother of the person
  • Spouse’s Great Grand Father of the person
  • Spouse’s Great Grand Mother of the person
  • Spouse’s Great Grand Father of the person
  • Spouse’s Great Grand Mother of the person
  • Sibling’s wife of the person
  • Mother’s Brother’s Wife of the person
  • Spouse’s Brother’s Wife of the person