The picture?
sixth Pay Commissions Orders Of Implementation has been submitted, and for lakhs of central government employees who will be receiving 40% of accumulated arrears in next month salary, will have to pay tax on entire amount of arrears. The remaining 60% of arrears will be paid in next fiscal year. Good news is that for next year there will not be any tax.
Bad part is for senior bureaucrats there is surcharge of 10% on an income of Rs 10 lack and above, ie if expected net pay arrears = 10,47,684 then actual net pay arrears will be 8,30,640.
This is applicable to officers of the rank of joint secretary and above. The impact of this tax will be less.
Why is it So?
The hike of 21% as announced will be effective from January 1, 2006. Which is burden of Rs, 17,500 core annually and arrears alone is more than 29,000 cores. To bring down this burden arrears will be paid 40% this year and 60% in 2009-10 fiscal year.
What about Jawans pay grievances?
Armed forces withheld implementation of sixth pay commissions for them till the parity with their civilian and paramilitary counterparts is restored. Extant parity of Lt-Col rank officers being lowered to pay band -3 (Rs 15,600- 39,100) and raising similarly placed civilians and paramilitary officers to pay band- 4 PB-4(Rs 37,400 - 67,000).