7th Pay Commission and UGC Pay Review Committee

Gifting a Christmas and New Year bonanza to displeased university and college teachers, the Centre has approved the recommendation of an empowered committee – set up to review the Chadha Committee proposal – for reforming the pay structure of higher education teachers. Wooing to over five lakh hier educators across the country in an election-year, the Union Cabinet on December 15, 2008 has approved the proposal of the committee in the presented form, which suggests enhancement of teacher’s salary nearby 70 percent excluding other emoluments. Announcing the details of approved pay revision on Tuesday (Dec 16), Minister of State in the Ministry of Human Resource Development D. Purandeswari told the Parliament that salary was one of the critical factors in higher education sector that was affecting the quality of education and unable to attract the young and talented person to the teaching profession. Viewing this, the government has decided to restore the dignity and pride of the t...

The revised salary package, announced on 16 December, 2008, offers hefty hikes effective from 1 January, 2006 New Delhi: The government will have to provide for a whopping Rs9,000 crore annually from the exchequer for paying revised salary and allowances to over five lakh university and college teachers. The revised salary package, announced on 16 December, 2008, offers hefty hikes effective from 1 January, 2006. “As per the calculation we have done, about Rs9,000 crore will be spent annually for implementing the revised pay of university and college teachers in the country,” Higher Education Secretary R.P. Agrawal said. He said that the Finance Ministry will make the budgetary provision soon for the purpose. As per the announcement, financial assistance will be provided by the Centre to the states which may opt for these revised pay scales, to the extent of 80% of the additional expenditure for implementing the revised pay scales for the duration from 1 January, 2006 to 31 March, 2010...

In an election-year bonanza to more than five lakh teachers in colleges and universities, the Centre has approved a proposal for a 70 per cent salary hike, making teaching at certain levels more attractive than civil service. The Union Cabinet has approved the recommendations of the University Grants Commission’s (UGC) pay review committee for teachers headed by Professor G K Chadha.While the revision of pay will be effective from January 1, 2006, the disbursement of allowances (except DA) and advance increments will be effective from September 1, 2008.In place of “grade pay” as applicable to Central government employees, the term “academic grade pay” (AGP) should be used for teachers and those with equivalent positions. Different grade pays of Rs 6,000, Rs 7,000, Rs 8,000, Rs 9,000, Rs 10,000 and Rs 12,000 have been approved as AGP for teachers and equivalent positions.Higher AGP of Rs 6,000 has been recommended for all assistant professors at the entry level so as to make it more att...

NEW DELHI: The Centre on Tuesday announced the implementation of the much awaited pay revision for more than five lakh teachers in the universities and colleges across the country. Union Minister for Human Resource Development Arjun Singh said that all the recommendations of the Chadha committee have been accepted and they would be implemented with effect from January 1, 2006. The UGC pay review committee headed by Prof G K Chadha had recommended 70 percent hike in pay and other emoluments for teachers in the universities and colleges. The pay hike package would also be valid for state-run colleges and universities recognised by the UGC. While the revision of pay will take effect from January 1, 2006, the allowances (except DA) and advance increments shall take effect from September 1, 2008. Making a statement in the Lok Sabha, Minister of State for HRD Purandeswari said “We have begun a process of restoring the dignity and pride in being associated with the teaching profession.’’ Acco...

New Delhi: The proposal for a 70 per cent salary hike for college educators has finally got the Cabinet go-ahead, said sources on Monday. The Cabinet clearance for the recommendations of the University Grants Commission’s (UGC) Pay Review Committee for teachers, led by Professor G K Chadha, will benefit more than five lakh teachers in over 400 universities and more than 6,000 colleges. Incidentally, the clearance came on a day when around 8,000 teachers in Delhi University started an indefinite strike to demand an increase in their pay scales. In addition to a 70 per cent hike in pay, the UGC panel has recommended additional allowances and new positions to academics in the higher education sector. It has also suggested that the age of retirement be raised to 65 years, extendable up to 70 years. Other perks recommended by the UGC include monetary and non- monetary incentives to ensure teachers do not face stagnation and a ‘revolutionary recruitment policy’ to attract youngsters to teac...

Estimation of income tax for this year is very important as we are in the new pay scale and have drawn arrears for previous years too. Needless to say, the end result is we have to pay more tax than the previous years. But tax planning at an early date may reduce some of your tax burden. For example, you may want to go for a tax saving instrument and pay for it in easy installments rather than paying in lump sum at the end of the year. If nothing works, if you know your taxes now, you could ask your administration to deduct your tax liability on monthly basis from now onwards atleast. For your ease and prudent tax management, GConnect has come up with a full fledged online Income tax software for the year 2008-09, which will be definitely useful for finding out your tax liability, tax treatment on your house property, HRA, 6CPC arrears etc.

The lack of clarity over taxation of arrears that government employees will receive following the implementation of the 6th Pay Commission recommendations has finally cleared. The tax on first installment will be deducted in the current fiscal and that on the second installment will be deducted next year when they receive the actual payment. Confusion had arisen about the tax treatment of the pay arrears that central government employees are about to get as part of their latest wage revision. According to finance ministry sources, only the first installment of the arrears would be taxed this fiscal. The taxation, they would be akin to the tax treatment in 1997 when the fifth pay commission recommendation was implemented wherein the tax was deducted at the time of payment.

The lack of clarity over taxation of arrears that government employees will receive following the implementation of the 6th Pay Commission recommendations has finally cleared. The tax on first installment will be deducted in the current fiscal and that on the second installment will be deducted next year when they receive the actual payment. Confusion had arisen about the tax treatment of the pay arrears that central government employees are about to get as part of their latest wage revision. According to finance ministry sources, only the first installment of the arrears would be taxed this fiscal. The taxation, they would be akin to the tax treatment in 1997 when the fifth pay commission recommendation was implemented wherein the tax was deducted at the time of payment.

We are all aware arrears payable on account of implementation Sixth Pay Commission are to be paid in two installments — 40% this year and the rest next year. As per reports, the tax on first installment will be deducted in the current fiscal and that on the second installment will be deducted next year. Now, when arrears of pay are received in any particular year, it could artificially raise the tax liability in that year. This happens because due to the receipt of arrears, the total income increases and consequently the tax payable increases. However, this is unfair to the taxpayer. Had he originally received the money in the year (s) that he was supposed to receive it, the additional tax would have been staggered over the years instead of converging in one year as a lump sum payment . Therefore, the law allows a tax deduction under Sec. 89(1) for this additional tax burden and we will be examining the same in detail. Incidentally, this deduction is available to every taxpayer wh...

For the Receipt of pay and allowances pertain to previous years as arrears, Income tax Act provides for a relief under Section 89(1) of the IT Act. It works as follows. Spread the arrears that you have received to the respective years. For example, if you have received arrears for the last two financial years and the current year break it into three (i.e) for the year 2006-07, 2007-08, and 2008-09. Calculation 1 Calculate income tax for the taxable income without including arrears for 2006-07 and 2007-08 seperately based on tax structure applicable during these years. Then add apportioned arrears to the respective year’s taxable income and again find the tax. Find the difference in tax on account of addition of arrears portion. this difference has to be calculated for 2006-07 and 2007-08 seperately. Then these two difference tax amounts have to be added to find out the total difference in tax on account of arrears portion added to the taxable income in the relevant years. This is the r...