Govt approves hefty pay hike for college teachers

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 teachers for joining teaching profession, said HRD minister for state and added ‘I hope and agree that this is a significant step towards that goal.’

On the sequel of the Sixth Pay Commission, the University Grant Commission (UGC) had set up a pay review committee under the Chairmanship of Prof. G K Chadha, Member, Economic Advisory Council to the Prime Minister, on September 06, 2007 to review and reform the pay structure enable to attract and freeze young and talented people in this profession.

According to approved recommendation, the HRD Ministry has decided to retain only three designations in colleges and Universities: Assistant Professors, Associate Professors and Professors from now on, while the current running posts of Lecturers and Readers would be remain unaffected until the employees of these posts get promotion to the post of Associate Professors following the established norms of UGC.

Now, the term ‘Academic Grade Pay’ (AGP) would be used for academicians’ salary in the place of ‘Grade Pay’ (GP) used for Central government employees, suggested pay revision committee.

Different AGP has been fixed for teachers and employees of equivalent positions of Rs. 6,000, Rs.7,000, Rs. 8,000, Rs.9,000, Rs.10,000 and Rs.12,000. Assistant professors at the entry level have been placed in the Pay Band of Rs. 15,600-39,100 entering at the AGP of Rs. 6,000, while associate professors with AGP of Rs. 9,000 have placed in the pay band of Rs. 37,400-67,000. A professor with 10 years experience has been placed at the highest level of AGP of Rs. 12,000.

A Ph.D holder teacher can get fastest promotion from the post of assistant professor to associate professor after the completion of a 12-year service as an assistant professor, working four years at AGP of Rs. 6000, five years at AGP of Rs. 7000 and three years at the AGP of Rs. 8000. The ministry has also reported that a postgraduate professional course teacher having M Phil can become Associate Professor after completing 13 years of job while those lacking Ph.D. or M.Phil can become Associate Professor after 14 years of service as assistant professor.

Now, National Eligibility Test (NET) will be essential for being Assistant Professor while those currently employed without qualifying NET will be remain unaffected, but this condition will not be applicable for such Masters’ programmes for which NET is not available.

The equality among teachers, librarians and directors of physical education will continue except the retirement age, as the librarians/physical education personnel will continue to get retirement after 62 years of age.

This salary approval will not applicable to Registrars, Finance Officer, Controller of Examinations, Deputy Registrars and their equivalent posts; there will be a separate approval to be granted later by the Cabinet.

The State Universities are also eligible to implement this pay approval either equivalent or higher in their state and get 80% of finance assistant from UGC for additional expenditure on implementing revise pay scale package and other expenses, stated HRD ministry.

The financial assistance for revised payment to the state universities will be granted for the period of January 01, 2006 to March 31, 2010, while state universities can implement the same as the date mentioned or later. However, the allowance excluding Dearness Allowance (DA) and other advance increment will be effective from September 01, 2008.

Govt to spend Rs9,000 cr annually for revised pay to teachers

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.

“The Rs9,000 crore include the assistance to be given by the Centre to the states till 2010 March,” he said.

After March 2010, the Centre will stop providing assistance to the state governments for this purpose.

The UGC-appointed Prof G.K. Chadha committee had recommended the raising of the retirement age for university and college teachers to 65 years.

Agrawal said that the retirement age has been made 65 years in the central universities.

“As far as the state universities are concerned, we have asked the states to raise the retirement age to 65 years. But we cannot force them,” he said.

At present the retirement age varies from states to states. There are states where it is 55 years while certain states have 58, 60, 62 and 65 as the age of retirement.

The Chadha committee had also recommended that the Centre and the states should implement the revised pay package from a single date — 1 January, 2006.

Agrawal said that the Centre would implement its part in the central universities from 1 January, 2006. It has also asked the states to implement the revised salary from that date.

“But they cannot be compelled to implement it from January one, 2006. They have the liberty to implement from a later date,” he said.

The Central Assistance shall be limited to the UGC scales of pay and only for the period ending on 31 March, 2010. While the revision of pay scales will take effect from 1 January, 2006, the allowances (except DA) and advance increments etc would take effect from September one, 2008.

As per the announcement of the government, there will be three positions — Assistant Professors, Associate Professors and Professors in universities and colleges.

As per the revised package, Assistant Professors have been placed in the Pay Band of Rs15,600 to Rs39,100 entering at the Academic Grade Pay (AGP) of Rs6000.

Similarly, Associate Professors and professors have been placed in the Pay Band of Rs37,400 to Rs67,000 with different grade pay.

Vice chancellors would get Rs75,000 fixed in addition to Rs5,000 as special allowance as against the present fixed pay of Rs25,000.

UGC pay hike gets govt nod

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 attractive compared with the entry level grade pay for the civil servants and other professionals under the 6th Central Pay Commission.
Announcing the government decision on Tuesday in the Lok Sabha, Minister of State for Human Resource Development D Purandeswari said the ministry’s proposals on pay revision of teachers for UGC-approved colleges and universities had been okayed by the Cabinet.Review committee“As a sequel to the 6th Central Pay Commission, the UGC had constituted a pay review committee for recommending, among other things, the ways and means of attracting and retaining talented persons in the teaching profession and furtherance of research in the university system,” Purandeswari said.The committee submitted its report in October last and the UGC furnished its recommendations within a few days. An empowered committee was constituted on October 10 and based on its recommendations, the proposals formulated by the ministry were considered by a committee of secretaries in its meeting held on December 5.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.

Government okays pay hike for college teachers

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.’’ According to the revised pay scales approved by the government, there shall be only three designations in respect of teachers in universities and colleges, namely, Assistant Professors, Associate Professors and Professors.
In place of “Grade Pay” as applicable to Central Government employees, the term “Academic Grade Pay” (AGP) shall be used for the teachers and equivalent positions.
Different Grade Pays of Rs 6,000, Rs 7,000, Rs 8,000, Rs 9,000, Rs 10,00 and Rs 12,000 have been approved as AGP for teachers and equivalent positions.
Higher Academic Grade Pay of Rs 6,000 has been recommended for all Assistant Professors at the entry level so as to make it more attractive compared to the entry level Grade Pay for the Civil Services and other professionals under the sixth Central Pay Commission.
Under the revised scheme, Assistant Professors have been placed in the Pay Band of Rs 15,600-39,100 entering at the AGP of Rs 6,000. A teacher with a PhD degree can move from the post of Assistant Professor to Associate Professor after completion of 12 years of service as Assistant Professor, spending four years at the AGP of Rs 6,000, five years at the AGP of Rs 7,000 and three years at the AGP of Rs 8,000.
Teachers with M.Phil and those with a postgraduate degree in a professional course entering as Assistant Professors can become Associate Professor after 13 years of service. The Associate Professors have been placed in the Pay Band of Rs 37,400- 67,000 with Grade Pay of Rs 9,000.

Cabinet clears teachers’ pay hike

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 teaching.

Women teachers also stand to benefit in a big way, with a recommendation to grant a special two-three year sabbatical to them over and above an extended maternity leave to help them rear their children.

The UGC committee also advocated the introduction of new positions, like senior associate professor, senior professor and professor of eminence.

According to the recommendations, at the entry level, a faculty member will join as an assistant professor, not as a lecturer as earlier. While a lecturer’s pay scale is currently between Rs 8,000 to Rs 13,500, it will now lie between Rs 15,600 to Rs 39,100 for assistant professors, assistant professors (senior scale) and assistant professors (senior grade). Similarly, the committee has recommended a new pay band of Rs 37,400 to Rs 67,000 for professors against the existing scale of Rs 16,400 to Rs 22,400. A vice-chancellor will get a fixed amount of Rs 80,000 per month against the present package of Rs 25,000.

At college level, a principal will be entitled for the package of a professor as against the current package of Rs 12,000 to Rs 22,400, he said.

Apart from the existing allowances, the committee has suggested the introduction of an academic allowance of Rs 1,500 per month, as well as allowances towards house rent, transport, special duty, travel and medical expenses. Teachers with good performance records can get an annual increment of up to four per cent.

GConnect Income tax calculator for the year 2008-09

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.

6CPC Pay and Arrears - Income Tax Estimation

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.

6CPC New Pay and Arrears - Estimation of Income tax payable for the year 2008-09

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.

Tax Relief for 6CPC Arrears

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 who gets salary in advance or in arrears, whether such person is government employee or is working in the private sector.
Sec. 89(1)
Basically, the relief under Sec. 89(1) is arithmetical. It involves the ascertaining the two amounts of tax – the first is the amount of tax applicable to the total income including the extra amount in the year of receipt. The second is calculating the amount of tax by adding the arrears to the total income of the years to which they relate. The difference between the two amounts is the amount of deduction allowed.
In other words, if the taxpayer is required to pay any additional amount of tax (in the year of receipt) than what he would have otherwise paid, had he received the money in the year(s) that he was supposed to receive it, such additional tax need not be paid i.e., it can be reduced from the tax payable.
Let us take a numerical example to further amplify this issue.
Say Officer A receives Rs. 2 lakh in the current year as arrears of pay. This money was actually pertaining to the year 2006, 2007 and 2008. Now let’s assume that ordinarily, as per his salary level, Vishal would have paid a tax of Rs. 10000. But just because of the inclusion of the Pay arreares this year his tax payable climbs to Rs. 30000.
Now, for a moment let’s go back to the year 2006, and 2007. Officer A had paid a tax of Rs. 10,000 and Rs.11,000 during those years (2006 and 2007) respectively. But had the Year wise pay arrears been paid to him in those years itself, Officer would have paid a higher tax of Rs. 16,000 and Rs,18,000/-. Given this data, let us calculate the tax deduction available to Vishal.
(Note that these figures are hypothetical and meant as an example for ease of understanding – in reality, actual computations will have to be undertaken.)
Year
Particulars
Amt (Rs.)
Amt (Rs.)
2008
Tax payable with arrears
30,000
Tax payable without arrears
10,000
Difference
20,000
2006
Tax payable including Pay arrears
10,000
Tax payable excluding Pay arrears
16,000
Difference
6000
2007
Tax payable including Pay arrears
18,000
Tax payable excluding Pay arrears
11,000
Difference
7,000
Extra tax payable just on account of the arrears (Sec 89(1) deduction)
7,000
Lastly, since it is the extra tax on the arrears that is the relief admissible under Sec. 89(1), it follows that if there is no excess, no relief is admissible. In other words, if the tax in the year of receipt works out to be actually lower than what was payable in the past, no relief under Sec. 89(1) can be claimed.

Income Tax Relief for 6CPC Arrears under Section 89(1)

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 resultant amount calculated in “Calculation 1″

Calculation 2

Then find out the income tax for the current year without including the arrears. Then find out the income tax for current year after including the total arrears received which relates to current year and also the previous years. Difference of these two tax amounts is the additional tax we have to pay on account of receipt the arrears for the current year and the previous years. This is the resultant amount calculated in “Calculation 2″

Now, subtract the resultant amount as per “Calculation 1″ from the resultant amount as per “Calculation 2″. This gives your income tax relief under Section 89 (1). Obviously, if resultant amount as per “Calculation 1″ is not less, relief is Nil.

This calculation gains significance as all of us have received the 6CPC arrears during this year which may add to our tax liability.

Since this calculation is little bit complex if not difficult, GConnect has come up with an application to calculate Income tax relief under Section 89(1).

Check this Calculator for Income Tax relief under Section 89(1)

Also, GConnect has a full-fledged Income Tax Calculation application for finding your tax liability for the year 2008-09 (Assessment year 2009-10)

Check this Income Tax Calculation for the year 2008-09

Also check Income tax calculation on house property and Income tax calculation for HRA