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About the Hand BookAbout the Hand BookAbout the Hand BookAbout the Hand Book

This handbook of FAQs is designed to capture common concern of employees related to Payroll, PF, Superannuation & Gratuity. It is

intended to be used as a guide to resolve your queries on your own. It describes with examples for your better understanding. This

book is written based on current rule and procedure. Employees will be notified of subsequent changes to the revised edition of

handbook as they occur.

No employee handbook can anticipate every circumstance or question. Even if we have tried our best to cover all great detail for more

detailed questions, please do contact us.

We have also developed a Web Call Center” a web based system to capture grievances through structured manner. Please use the

system to log a call for your grievances. We are regularly monitoring this to resolve all your queries.


First edition dated 31stMarch,2012 PayrollPayrollPayrollPayroll &&&& TrustTrustTrustTrust ManagementManagementManagementManagement TeamTeamTeamTeam

Our team and their contacts

Salary Components & Superannuation related query Mr. GOPAL MISHRA 022-67171673

Full &Final Settlement related query Ms. P T TRIVEDI 022-67171674

Income Tax related query Ms. U M RAJPUT 022-67171682

Provident Fund Compliance & Accounting related query Ms. ROSHNI SIGANPORIA 022-67171679

Provident Fund Loan, Transfer & Hard Furnishing

related query

Ms. SUDHA DHARMARAJ 022-67171677

LTA, Phone, Medical, Car Fuel, Maintenance Driver

Salary reimbursement & Pension related query

Ms. FARIDA MISTRY 022-67171681

Gratuity & Company Loans related query Mr. RAMCHANDRA KRISHNA NARKAR 022-67171683

To escalate any mater please feel free to contact Mr. DEB NARAYAN SARKHEL 022-67171678

Table of ContentsTable of ContentsTable of ContentsTable of ContentsQuestion NoQuestion NoQuestion NoQuestion No DescriptionDescriptionDescriptionDescription PagePagePagePage

Section Section Section Section ---- I ( Payroll)I ( Payroll)I ( Payroll)I ( Payroll)Q1. What is the primary structure of our monthly salary? 1

Q2. What is flexi allowance? 1

Q3. Why is this called Flexible? 1

Q4. What is difference of CTC and monthly payroll components? 1

Q5. Is allocation Flexi Allowance compulsory if so why? 1

Q6. What is Cash Allowance? 2

Q7. Is cash allowance fixed component? 2

Table I (Below Senior Manager Grade) Fixed amount allocated in flexi 3

Table – II Variable amount like Medical, Phone, LTA, Self education reimbursement allocated in Flexi 4

Table III (Senior Manager & Chief Manager)

Senior Manager & Chief Manager can also allocate the car related expenses . Such allocation is shown in this table.5

Q8. What is flexi rent? Table IV How the flexi rents adjust is being shown in this table. This is a case of Flexi Rent recovered @ 15% of Basic

Salary. If the employee is staying in a bachelor accommodation then the recovery will 7.5% of Basic.

6

Table V One more example partly HRA and partly Company Leased Accommodation (Flexi as per old grade based as well as current %

based).7


based).7

Q9. Why there is all time arrear adjustment either negative or positive in Cash Allowance? 7

Q10. What is O& M Allowance? 8

Q11. When Additional HRA is applicable? 8

Q12. What is Compensatory Allowance? 8

Q13. What is Medical Fund? 8

Q14. What is Mutual Benefit Fund (MBF)? 8

Q15. What is Self Education payment? 8

Q16. What is Accommodation Perquisites? 8

Q17. What is Electricity Perquisites? 8

Q18. What are Electricity/ Other Perquisites? 8

Q19. What happens when an employee does not claim any amount allocated towards Phone, Medical etc? 8

Q20. Why sometimes there is no salary? 9

Q21. Why sometimes Phone payment voucher cannot be created? 9

Q22. How much HRA can be allocated in Flexi? 9

Q23. What is CAR_EMI payment? 9

Q24. Can anybody claim Income Tax exemption on declaration basis? 9

Q25. Is conveyance exemption applicable if Car Facility is availed? 9

Q26. When House Rent Allowance is payable? 9

Q27. When telephone bill is reimbursable? 9

Q28. Is salary banking mandatory ?Is part banking facility available? 9

Q29. What are Income tax benefits of taking and repaying a housing loan under EMI Plan? 10

Q30. If I buy a house jointly with my wife and take a joint home loan, can we both claim income tax deduction? 10

Q31. My husband and I have jointly taken a home loan. He pays 75 percent of the EMI. What will be our individual tax benefits? 10

Q32. What is “Employer Tax” and “ Tax Reimbursed” shown in Pay Slip ? 10

Q33. What are the tax benefits that I can avail of for repaying a home loan ? 10

Q34. Can I take advantage of tax benefits from a home loan as well as claim House Rent Allowance (HRA) ? 11

Q35.I have a home loan in which I am a co-applicant. However, the total EMI amount is paid by me. What is the total income tax exemption that I

can avail of ?11

Q36. I have two housing loans on two different properties. Can I get tax rebate under sec 80 C for both the loans? 11

Q37. How to Calculate the Income Tax Exemption on House Rent Allowance (HRA) ? 11

Q38. How perquisite in respect of accommodation is calculated ? 12

Q39. How perquisite in respect of Holiday Home calculated ? 12

Q40. What is current Tax Rate ? 12

Section Section Section Section ---- II ( Provident Fund)II ( Provident Fund)II ( Provident Fund)II ( Provident Fund)Q1. What is Provident Fund and who can become members of The Tata Power Consolidated Provident Fund? 14

Q2. From which date is the membership of employees effective? 14

Q3. Who manages/controls The Tata Power Consolidated Provident Fund? 14

Q4. What does the Provident Fund comprise of? 14

Q5. What is Voluntary Contribution? 14

Q6. How does the fund grow? 14

Q7. Is employee the only beneficiary of the fund? 14



Q8. What is nomination? 15

Q9. How long is the money retained in the fund? 15

Q10. What does Family mean? 15

Q11. What is Board of Trustees (BOT) ? 15

Q12. Is it possible to draw money from Provident Fund while in service? 15

Q13. What are the specific purposes for which loans from the fund are possible? 15

Q14. What are the maximum limits up to which the refundable advances/loan are permissible? 16

Q15. What are the conditions for grant of refundable advances? 16

Q16. What are the specific purposes for which Non-Refundable loan/withdrawals from the fund is possible? 16

Q17. What are the conditions to be fulfilled for the various purposes for which non-Refundable loans are granted? 17

Q18. What are the maximum limits up to which the non-refundable advances/loans are permissible ? 18

Q19. When can the final withdrawal be made? 19

Q20. Is the final withdrawal free of Income Tax? 20

Q21. Is the Provident Fund Accumulation Tax free if an employee retires/resigns from the organization after serving 4 years 6 months? 20

Q22. What special provisions are applicable for members resigning from the company? 20

Q23. Can the Provident Fund of a member from his ex-employer be transferred? 20

Q24. What is the rate of interest given to members? 20

Q25. What will happen when there is no claim of final withdrawal from Provident fund or no application received for transfer ? 20

Section III (Gratuity FAQs)Section III (Gratuity FAQs)Section III (Gratuity FAQs)Section III (Gratuity FAQs)Q1. If gratuity is received from different employers in the same year, what will be the ceiling of exemption ? 23

Q2. Why is Gratuity paid ? 23

Q3. What is the eligibility for receiving Gratuity ? 23

Q4. What is Continuous Service? 23

Q5. If an Individual receives Retirement Gratuity from more than one employer, are both the amounts exempt from tax? 23

Q6. If gratuity is received from different employers in the same year, what will be the ceiling of exemption ? 23

Q7. What is Eligibility for receiving Gratuity 23

Q8. How is Gratuity calculated as per Gratuity Act 23

Q9. How to determine years of service? 24

Q10. What is the maximum amount of gratuity payable ? 24

Q11. What is the Tax treatment of Gratuity ? 24

Q12. Is our gratuity payment covered by Gratuity Act ? 24

Q13. What is the basis of last salary for calculation of our gratuity payment. ? 24

Q14. What is the company rule for Gratuity Payment? 24

Q15. Is Gratuity a mandatory benefit? 25

Q16. Who can be the nominees? 25

Q17. How does one make a Nomination? 25

Q18. Whether employee can change nominees? 25

Q19. Is there any specific rule of Gratuity payment for Group employees? 25

Q20. Is Gratuity transferable to the next employer like Provident Fund? 25


Q20. Is Gratuity transferable to the next employer like Provident Fund? 25

Q21. Is Gratuity forfeited? 25

Q22. How to determine 1 month incase of an employee working in an establishment for 22 days in 1 month ? 25

Q23.) How the gratuity amount is computed? 25

Section Section Section Section ---- IV ( Superannuation Fund)IV ( Superannuation Fund)IV ( Superannuation Fund)IV ( Superannuation Fund)Q1. What is Superannuation Fund? And Who can become members of The Tata Power Company Ltd. Superannuation Fund? 26

Q2. From which date is the membership of employees effective? 26

Q3. What are the duties of an employer in case of Superannuation Scheme? 26

Q4. Who manages/controls The Tata Power Company Ltd. Staff Superannuation Fund? 26

Q5. How does the Superannuation Fund function? 26

Q6. How long is the money retained in the fund? 26


Q8. What is nomination? 27

Q9. When the final withdrawal can be made? 27

Q10. When the final withdrawal can be made? 27

Q11. Can the Superannuation Fund accumulation of a member from his ex-employer be transferred? 27

Q12. What is the rate of interest given to members and what are various option of superannuation scheme ? 27

Q13. Can an employee withdraw superannuation accumulation during the tenure of his service ? 27

Q14. What are the various options under the superannuation scheme ? 27

Q15. Can an employee withdraw during the tenure of his service ? 28

Q16. Is service tax applicable on Superannuation Contribution ? 28

Q1111....)))) WhatWhatWhatWhat isisisis thethethethe primaryprimaryprimaryprimary structurestructurestructurestructure ofofofof ourourourour monthlymonthlymonthlymonthly salary?salary?salary?salary?

Ans. Our monthly salary structure is very simple. Our monthly salary consists of two primary wage elements. One is Basic salary and the other is Flexi

Allowance i.e. 80% ( in general) , 125% & 140% of Basic Salary depending on the work level. There are also few more wage elements like Additional

HRA, O&M Allowance, Compensatory Allowance, Remote Station Allowance, Night Shift Allowance, etc.

Q2222....)))) WhatWhatWhatWhat isisisis flexiflexiflexiflexi allowance?allowance?allowance?allowance?

Ans. The basic components of our compensation structure are Basic Pay and Flexible Allowance. Currently the amount stands for Flexi Allowance at 80% of

Basic Salary upto the level of General Manager

e.g. The Basic Salary of Mr. A is Rs.27,350/-

Flexible Allowance is 80% of Rs. 27,350/- i.e. Rs. 21,880/-.

Q3333....)))) WhyWhyWhyWhy isisisis thisthisthisthis calledcalledcalledcalled Flexible?Flexible?Flexible?Flexible?

Ans. This is Flexible because the employee on his own discretion can allocate this amount in different heads as per pattern mentioned in his appointment

contract. Such as Medical, Phone, House Rent, Children education, Self education, Leave Travel Assistance, Employees of Senior Manager and Chief

Manager categories may also allocate this towards Car Fuel, Car Maintenance & Driver Salary as per limit prescribed in company’s Car Policy as

applicable to the grade.

Q4444....)))) WhatWhatWhatWhat isisisis differencedifferencedifferencedifference ofofofof CTCCTCCTCCTC andandandand monthlymonthlymonthlymonthly payrollpayrollpayrollpayroll components?components?components?components?

Section I (Payroll FAQs)Section I (Payroll FAQs)Section I (Payroll FAQs)Section I (Payroll FAQs)


Ans. CTC - Cost to Company means salary paid by the company and includes company’s contribution to Provident Fund, Superannuation Fund, Gratuity,

company’s liability towards leave salary, Performance pay, Car & Car related expenses to be born by company, Hard Furnishing etc. It is a complete

gross package that an organization pays in the form of money and kind for working in the organization. CTC comprises all expense incurred by the

company and employee (like Employer contribution to PF,SF,GF Leave salary, Hard Furnishing, Car related expenses etc.) is being born by employer.

Payroll components are regularly paid monthly wages. It also includes the irregular payments like Performance Pay, Bonus etc.

QQQQ5555....)))) IsIsIsIs allocationallocationallocationallocation compulsorycompulsorycompulsorycompulsory ifififif sosososo why?why?why?why?

Ans. Allocation of amount from the flexi allowance helps the employee to save tax. Amount as allowed under the Income Tax Act for exemption as per the limit

specified :

Medical Rs. 15,000/-

LTA Actual (Subject to provision of proofs – An employee can get exemption of two journeys in a block of

four years; Current Block Year is 2010 - 2013 .

Telephone As per the limits under each work level

Education Rs.100/- per child per month

Hostel Rs. 300/- per child per month

House Rent Allowance As per Income Tax Rule Sec 10 (10A) i.e. 50% of Basic Salary

Conveyance Rs. 800/- per month where company car is not provided means below Senior Manager Grade

Apart from the above expenses incurred towards self education can also be allocated from flexi for tax exemption.

Page - 1

It is observed from the above table of flexi allocation that even if Mr. B’s Flexible Allowance is less by Rs.10,000/- than Mr. A, Mr. B is receiving in

Heads Mr. A Mr. B

Flexi Allowance Rs.80,000/- pm Rs.70,000/- pm

Allocation –Phone Nil Rs.825/- pm

Medical Nil Rs.1,250/- pm

LTA Nil Rs.3,000/- pm

Education (for two children) Nil Rs.200/- pm

HRA Nil Rs.20,000/- pm

A. Balance Cash Allowance (fully taxable) Rs.80,000/- pm Rs.44,725/- pm

B. Total of Phone, Medical, LTA, Education & HRA Nil Rs.25,275/- pm

C. Tax recoverable (considered as higher rate 30.90%) Rs.24,720/- Rs.13,820/-

Amount receivable in hand (A + B - C) Rs.55,280/- Rs.56,180/-


It is observed from the above table of flexi allocation that even if Mr. B’s Flexible Allowance is less by Rs.10,000/- than Mr. A, Mr. B is receiving in

hand an amount Rs. 900/- more than Mr. A.

QQQQ6666....)))) WhatWhatWhatWhat isisisis CashCashCashCash Allowance?Allowance?Allowance?Allowance?

Ans. Cash Allowance is the residual amount left after all allocation. Cash Allowance is taxable part of Flexi Allowance. In above example Mr. A’s Cash

Allowance is Rs.80,000/- and Mr. B’s Cash Allowance is Rs.44,725/-

QQQQ7777....)))) IsIsIsIs cashcashcashcash allowanceallowanceallowanceallowance fixedfixedfixedfixed component?component?component?component?

Ans. No, But if the flexi allowance is not allocated then it is fixed as because it is equal to flexi allowance. If the flexi allowance is allocated to monthly fixed

component then also the cash allowance does not vary..Suppose Mr. A’s flexi allowance is Rs.25,000/- per month. He has allocated Rs.800/-

towards conveyance, Rs.200/-for children education and Rs.10,000/- towards House Rent Allowance per month, then he will get balance

Rs.(25,000-800-200-10000) = Rs.14,000/- per month as cash allowance. In this case cash allowance is a fixed component.

But Mr. B’s flexi allowance is Rs.25,000/- per month. He has allocated Rs.800/- per month towards conveyance, Rs.1,250/- per month towards

medical then he will get Rs. Rs.(25000-1250-800)=Rs.22,950/- as cash allowance per month. In September he allocated 1,000/- per month means

Rs.12,000/- per annum towards LTA.

Then Mr. B’s cash allowance will suddenly reduce by Rs.6,000/- in September means he will get Rs.16,950/- and from October onwards his cash

allowance will be Rs. 21,950/- per month. Thus it is variable. Suppose Mr. B has claimed LTA of Rs.10,000/- in November and Rs. 8,000/- against

medical expenses in December. Then his cash allowance in March (means at the end of the year) will be Rs. 30,950/-. Since he has allocated

Rs,12,000/- towards LTA but claimed Rs.10,000/- and Rs.15,000/- towards Medical but claimed Rs.8,000/-.

Page - 2

Month Basic

Monthly

Flexi - 80%

of Basic

HRA Conveyance

Education

for two

child

Hostel for

one child

Total Paid

from Flexi

per Month

Monthly

Cash Allow

payable

April 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

May 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

June 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

July 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

A table of cash allowance calculation is given below

Table I (Below Senior Manager Grade) Fixed amount allocated from Flexi Allowance

…Message Box ( Arial, Font size 18 Bold)Page - 3

August 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

September 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

October 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

November 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

December 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

January 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

February 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

March 25,000.00 20,000.00 10,000.00 800.00 200.00 300.00 11,300.00 8,700.00

Table – II Variable amount like Medical, Phone, LTA, Self education reimbursement allocated in Flexi

MonthBasic

Montly

Flexi

Conv

(Paid)

Med

Allocat

e

Med

Paid

LTA

Allocat

e

LTA

(Paid)

Tel

Allocat

e

Tel

(Paid)

Self Edu

Allw

Allocat

e

Self Edu

Allow

(Paid)

Cash

Allw

(paid)

Total

paid

from

Flexi

Bal

Cash

Allw

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13)

(14=4+6

+8+10+

12+13)

(15=3-

14)

Apr61,310 49,048

800 1,250

-5,000

-825

725 2,000 - 39,173 40,698 8,350

May61,310 49,048

800 1,250

-5,000

-825

1,000 2,000 - 39,173 40,973 8,075

Jun61,310 49,048

800 1,250

-5,000

-825

500 2,000 - 39,173 40,473 8,575

Jul61,310 49,048

800 1,250

-5,000

-825

1,003 2,000 - 39,173 40,976 8,072

Aug61,310 49,048

800 1,250 15,000 5,000

-825

1,588 2,000 - 39,173 56,561 (7,513)

Sep61,310 49,048

800 1,250

-5,000

-825

1,588 2,000 - 39,173 41,561 7,487


Oct61,310 49,048

800 1,250

-5,000

-825

-2,000 22,000 39,173 61,973 (12,925)

Nov61,310 49,048

800 1,250

-5,000

59,100 825

-2,000 - 39,173 99,073 (50,025)

Dec61,310 49,048

800 1,250

-5,000

-825

-2,000 2,000 39,173 41,973 7,075

Jan61,310 49,048

800 1,250

-5,000

-825

-2,000 - 39,173 39,973 9,075

Feb

61,310 49,048 800

1,250 -

5,000 -

825 -

2,000 - 39,173 39,973 9,075

Mar61,310 49,048

800 1,250

-5,000

-825

3,496 2,000 - 40,073 44,369 4,679

Total735,720 588,576

9,600 15,000 15,000 60,000

59,100 9,900

9,900 24,000 24,000 470,976 588,576 -

Total Flexi Payable 588,576.00

Paid through Conveyance 9,600.00

Paid through LTA 59,100.00

Paid through Medical 15,000.00

Paid through Self Education 24,000.00

Paid through Phone 9,900.00

Cash Allowance paid 470,976.00

Balance payable/(Recoverable) in March Nil

Table III (Senior Manager & Chief Manager)

Senior Manager & Chief Manager can also allocate the car related expenses . Such allocation has shown in this table.

Month BasicMonthly

Flexi

Ful_Mnt_Fl

exi

(Alloted)

Ful Paid Mnt_PaidDrv_Flexi

(Alloted)Drv_Paid

Cash

Allow Paid

Total Paid

from Flexi

Bal. Cash

Alw

(1) (2) (3) (4) (5) (6) (7) (8) (9)(10=5+6+8

+9)(1)

Apr 68,670 54,936 9,500 - 3,000 3,500 3,500 41,936

48,436 6,500

May 68,670 54,936 9,500 6,000 - 3,500 3,500 41,936

51,436 3,500

Jun 68,670 54,936 9,500 2,000 - 3,500 -41,936

43,936 11,000

Jul 68,670 54,936 9,500 5,000 - 3,500 -41,936

46,936 8,000

Aug 68,670 54,936 9,500 13,500 - 3,500 -41,936

55,436 (500)

Sep 68,670 54,936 9,500 18,750 - 3,500 14,000 41,936

74,686 (19,750)


Sep 68,670 54,936 9,500 18,750 - 3,500 14,000 41,936

74,686 (19,750)

Oct 68,670 54,936 9,500 9,000 - 3,500 -41,936

50,936 4,000

Nov 68,670 54,936 9,500 2,500 - 3,500 -41,936

44,436 10,500

Dec 68,670 54,936 9,500 11,500 - 3,500 -41,936

53,436 1,500

Jan 68,670 54,936 9,500 - 22,000 3,500 14,000 41,936

77,936 (23,000)

Feb 68,670 54,936 9,500 7,500 - 3,500 -41,936

49,436 5,500

Mar 68,670 54,936 9,500 5,500 - 3,500 -56,686

62,186 (7,250)

Total 824,040 659,232 114,000 81,250 25,000 42,000 35,000 517,982

659,232 -


Paid through Car Fuel 81,250.00

Paid through Car Maintenance 25,000.00

Paid through Driver 35,000.00



QQQQ8888....)))) WhatWhatWhatWhat isisisis flexiflexiflexiflexi rent?rent?rent?rent?

Ans. If an employee opts for company accommodation then an amount as per his grade and as mentioned in the appointment contract an amount will be

recovered from his salary. This is called Flexi Rent. His monthly flexi allowance will be reduced by this amount.

Table IV The adjustment of flexi rent from Flexi Allowance is being shown in this table. This is a case of Flexi Rent recovered @ 15% of

Basic Salary. If the employee is staying in a bachelor accommodation then the recovery will 7.5% of Basic.

Month Basic Monthly

Flexi

Flexi rent

Recovera

ble

Bal Flexi EDU

(Paid)

Convey

(Paid)

Med

(Allot)

Med

(Paid)

Tel

(Allot)

Tel (Paid) Cash

Allow

(Paid)

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Apr43,530 34,824

6,530 28,295 100 800 1,250 2,371 825 884

25,320

May43,530 34,824

6,530 28,295 100 800 1,250 402 825 650

25,320

Jun43,530 34,824

6,530 28,295 100 800 1,250 562 825 633

25,320

Jul43,530 34,824

6,530 28,295 100 800 1,250 516 825 595

25,320

Aug43,530 34,824

6,530 28,295 100 800 1,250 4,446 825 -

25,320


Sep43,530 34,824

6,530 28,295 100 800 1,250 1,214 825 2,949

25,320

Oct43,530 34,824

6,530 28,295 100 800 1,250 1,855 825 1,122

25,320

Nov43,530 34,824

6,530 28,295 100 800 1,250 1,315 825 -

25,320

Dec43,530 34,824

6,530 28,295 100 800 1,250 - 825 1,672

25,320

Jan43,530 34,824

6,530 28,295 100 800 1,250 2,125 825 1,395

25,320

Feb43,530 34,824

6,530 28,295 100 800 1,250 194 825 -

25,320

Mar43,530 34,824

6,530 28,295 100 800 1,250 - 825 -

25,320

Total 522,360 417,888 78,354 339,534 1,200 9,600 15,000 15,000 9,900 9,900 303,834


Flexi rent recovered (15% of Basic) 78,354.00


Paid through Education 1,200.00


Paid through Phone 9,900.00



Month BasicMonthly

FlexiHRA (Paid)

Convey

(Paid)

Flexi rent

(Recov)

Medical

(Paid)

Total Paid

from Flexi

Balance

Cash

Allowance

Payable

Apr 4,400.00 6,240.00 0 0 0.00 6,240.00

May 11,000.00 15,600.00 11,000.00 1600.00 0 0 12,600.00 3,000.00

Jun 11,000.00 15,600.00 5,500.00 800.00 0 0 6,300.00 9,300.00

Jul 11,000.00 15,600.00 (5,500.00) 800.00 3,500.00 0 (1,200.00) 16,800.00

Aug 11,000.00 15,600.00 5500.00 800.00 3,500.00 0 9,800.00 5,800.00

Sep 11,000.00 15,600.00 0 800.00 3,500.00 0 4,300.00 11,300.00

Oct 14,780.00 11,824.00 0 800.00 2,217.00 0 3,017.00 8,807.00

Nov 14,780.00 11,824.00 0 800.00 2,217.00 0 3,017.00 8,807.00

Dec 14,780.00 11,824.00 0 800.00 2,217.00 0 3,017.00 8,807.00

Jan 14,780.00 11,824.00 0 800.00 2,217.00 0 3,017.00 8,807.00

Feb 14,780.00 11,824.00 0 800.00 2,217.00 15,000.00 18,017.00 (6,193.00)

Table V

One more example of partly HRA and partly Company Leased Accommodation (Flexi as per old grade based as well


Feb 14,780.00 11,824.00 0 800.00 2,217.00 15,000.00 18,017.00 (6,193.00)

Mar 14,780.00 11,824.00 0 800.00 2,217.00 0 3,017.00 8,807.00


Paid through HRA 16,500.00


Adjusted rent recovery from flexi for Company leased accommodation 23,802.00



Balance payable/(Recoverable) Nil

QQQQ9999 WhyWhyWhyWhy theretheretherethere isisisis allallallall timetimetimetime arreararreararreararrear adjustmentadjustmentadjustmentadjustment eithereithereithereither negativenegativenegativenegative orororor positivepositivepositivepositive inininin CashCashCashCash Allowance?Allowance?Allowance?Allowance?

Ans. Arrear adjustment happens whenever salary or any of its components are paid in arrears and this is shown in previous table. Arrear adjustment in

negative is shown in case of recoverable from previous months. This especially happens whenever Flexi Components are changed in the middle

of the month. See the effect of all addition alteration in between in Flexi Components like Phone, Medical, HRA, Self education, Child Education &

Hostel Car Flexi Fuel, Maintenance and Driver (For Senior Manager & Chief Manager) will be reflected as arrear adjustment either as negative or

positive in Cash Allowance. The cash will be reduced in the current month and there will be and arrear adjustment of negative Cash Allowance for

all the previous month starting from April.

QQQQ10101010....)))) WhatWhatWhatWhat isisisis O&O&O&O&MMMM Allowance?Allowance?Allowance?Allowance?

Ans. O&M allowance is payable to those who are working for six days and 48 hours in a week.

QQQQ11111111....)))) WhenWhenWhenWhen isisisis AdditionAdditionAdditionAddition HRAHRAHRAHRA applicable?applicable?applicable?applicable?

Ans. Those who are staying in the Company Leased Accommodation or Own Accommodation and electricity bills are being born by employee (in the

grade upto Chief Manager only); they are eligible to get Addition HRA. This is subsidy towards payment of electricity bill.

QQQQ12121212....)))) WhatWhatWhatWhat isisisis CompensatoryCompensatoryCompensatoryCompensatory Allowance?Allowance?Allowance?Allowance?

Ans. An amount is payable to those who do not get Food Coupons.

QQQQ13131313....)))) WhatWhatWhatWhat isisisis MedicalMedicalMedicalMedical Fund?Fund?Fund?Fund?

Ans. A trust fund has been formed to bear the expenses incurred actually payable while medical treatment in hospitalization, which is not reimbursed by

Insurance Company. An amount of Rs.150/- quarterly is recovered from the salary of the employees towards this fund.

QQQQ14141414....)))) WhatWhatWhatWhat isisisis MutualMutualMutualMutual BenefitBenefitBenefitBenefit FundFundFundFund (MBF)?(MBF)?(MBF)?(MBF)?

Ans. This is a contribution of Rs.100/- to be paid to the nominee of a deceased employee who dies while in service.


QQQQ15151515....)))) WhatWhatWhatWhat isisisis SelfSelfSelfSelf EducationEducationEducationEducation payment?payment?payment?payment?

Ans. An employee of management grade can claim the expenses incurred maximum upto Rs.1 Lakh for his further education as per our Self Education

Policy. The course must be approved by HR & the Divisional Head (GM or above) and only on receipt of the passing certificate of the course duly completed.

Also an amount of Rs.40,000/- may claim the non-management employees.

QQQQ16161616....)))) WhatWhatWhatWhat isisisis AccommodationAccommodationAccommodationAccommodation Perquisites?Perquisites?Perquisites?Perquisites?

Ans. Those who are staying in Company Own Accommodation or Company Leased Accommodation an amount as Perquisites will be added in his annual

income as per Income Tax Act. This is also applicable to those who are availing Free Accommodation as Project Related Benefit.

QQQQ17171717....)))) WhatWhatWhatWhat isisisis ElectricityElectricityElectricityElectricity Perquisites?Perquisites?Perquisites?Perquisites?

Ans. Those who are staying Company Own Accommodation or Company where electricity is provided by the company an amount as Perquisites will be

added with his annual income as per Income Tax Act.

QQQQ18181818....)))) WhatWhatWhatWhat areareareare Electricity/Electricity/Electricity/Electricity/ OtherOtherOtherOther Perquisites?Perquisites?Perquisites?Perquisites?

Ans. An amount is added as part of annual income when company is providing any benefit and amenities to the employees like Holiday Home. Under this

Electricity perk and Holiday Home perk and any other perk are shown together. The break-up of which is shown in other info column of the Pay Slip.

QQQQ 19191919.... )))) WhatWhatWhatWhat happenhappenhappenhappen whenwhenwhenwhen anananan employeeemployeeemployeeemployee doesdoesdoesdoes notnotnotnot claimclaimclaimclaim anyanyanyany amountamountamountamount allocatedallocatedallocatedallocated towardstowardstowardstowards Phone,Phone,Phone,Phone, MedicalMedicalMedicalMedical etc?etc?etc?etc?

Ans. The total amount is paid after deduction of tax at the year end i.e. in the month of March.

Q 20. ) Why sometimes there is no salary?Q 20. ) Why sometimes there is no salary?Q 20. ) Why sometimes there is no salary?Q 20. ) Why sometimes there is no salary?

Ans. The net amount payable is Total Earnings minus Total Deduction. If any amount paid is in excess either in the earlier month or

in the current month then recovery is more than earnings then the amount is transferred to claims receivable from employee.

Sometimes this happens to adjust the amount an employee receives more which he is eligible. In this case there is no salary.

This also happens in loss of pay cases.

Q 21, ) Why sometimes Phone payment voucher cannot be created?Q 21, ) Why sometimes Phone payment voucher cannot be created?Q 21, ) Why sometimes Phone payment voucher cannot be created?Q 21, ) Why sometimes Phone payment voucher cannot be created?

Ans. It requires updating the Phone No in Personal Data updation in SANGAM portal

Q 22, ) How much HRA can be allocated in Flexi?Q 22, ) How much HRA can be allocated in Flexi?Q 22, ) How much HRA can be allocated in Flexi?Q 22, ) How much HRA can be allocated in Flexi?

Ans. This amount can be up to a maximum of 50% of Basic as this is one condition to get HRA exemption as per Income Tax Act

Q 23. ) What is CAR_EMI payment?Q 23. ) What is CAR_EMI payment?Q 23. ) What is CAR_EMI payment?Q 23. ) What is CAR_EMI payment?

Ans. The employees of grade Senior Manager and above are eligible to get company car facility. Employees not opting company car

are eligible to get monetized value of car on monthly basis as per Company Car Policy. This is being paid as CAR_EMI. Even if

the value of car allotted to the employee is less than his eligibility the differential amount is also payable as CAR_EMI.


Q24.) Can anybody claim Income Tax exemption on declaration basis?Q24.) Can anybody claim Income Tax exemption on declaration basis?Q24.) Can anybody claim Income Tax exemption on declaration basis?Q24.) Can anybody claim Income Tax exemption on declaration basis?

Ans. No, One should submit the relevant documents as at actuals to get Income Tax rebate.

QQQQ25252525....)))) IsIsIsIs conveyanceconveyanceconveyanceconveyance exemptionexemptionexemptionexemption applicableapplicableapplicableapplicable ifififif availsavailsavailsavails CarCarCarCar Facility?Facility?Facility?Facility?

Ans. No, both cannot be availed simultaneously. This exemption is given to only those employees who are not provided company car or availed company car

scheme (i.e. Senior Manager and above)

QQQQ26262626....)))) WhenWhenWhenWhen HouseHouseHouseHouse RentRentRentRent AllowanceAllowanceAllowanceAllowance isisisis payable?payable?payable?payable?

Ans. There is no separate wage element as House Rent Allowance. This is a part of Flexi Allowance. Hence employee needs to allocate this amount from flexi.

House Rent Allowance can be allocated from the flexi in case the employees pay rent towards this house and submits the rent receipt along with the

application and agreement copy can get tax exemption as per income tax act u/s 10(13A).

QQQQ27272727....)))) WhenWhenWhenWhen telephonetelephonetelephonetelephone billbillbillbill isisisis reimbursable?reimbursable?reimbursable?reimbursable?

Ans. Telephone bill is a part of Flexi Allowance and this should be allocated by employee from flexi as per their eligibility. Telephone bill is reimbursable after

getting approved through SANGAM portal on monthly basis.

QQQQ28282828....)))) IsIsIsIs SalarySalarySalarySalary bankingbankingbankingbanking mandatory?,mandatory?,mandatory?,mandatory?, IsIsIsIs theretheretherethere anyanyanyany partpartpartpart bankingbankingbankingbanking facility?facility?facility?facility?

Ans. Yes, we bank salary through NEFT in any bank , having IFSC Code (Indian Financial Service code ).No, we transfer salary in one account only.

QQQQ 29292929.... )))) WhatWhatWhatWhat areareareare IncomeIncomeIncomeIncome taxtaxtaxtax benefitsbenefitsbenefitsbenefits ofofofof takingtakingtakingtaking andandandand repayingrepayingrepayingrepaying aaaa housinghousinghousinghousing loanloanloanloan underunderunderunder EMIEMIEMIEMI Plan?Plan?Plan?Plan?

Ans. You will be eligible to claim both the interest and principal amount of your repayment during the year. Interest can be claimed as a deduction under

Section 24. You can claim up to Rs. 150,000 or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of

the house) Principal amount can be claimed up to the maximum of Rs. 100,000 under Section 80C. This is subject to the maximum limit of Rs 100,000 across

all 80C investments. You will need to show the statement provided by the financial institution showing the repayment for the year as well as the interest &

principal components of the same.

QQQQ 30303030.... )))) IfIfIfIf IIII buybuybuybuy aaaa househousehousehouse jointlyjointlyjointlyjointly withwithwithwith mymymymy wifewifewifewife andandandand taketaketaketake aaaa jointjointjointjoint homehomehomehome loan,loan,loan,loan, CanCanCanCan wewewewe bothbothbothboth claimclaimclaimclaim incomeincomeincomeincome taxtaxtaxtax deduction?deduction?deduction?deduction?

Ans. Yes, if your wife is working and has a separate source of income, both of you can claim separate deductions in your income tax returns. The

repayment of principal amount of the loan can be claimed as a deduction under section 80C up to a maximum amount of Rs.1 lakh individually by each co-

owner. In cases where the house is owned by more than one person and is also self-occupied by each co-owner, each co-owner shall be entitled to the 50%

deduction individually on account of interest on borrowed money up to a maximum amount of Rs. 1.5 lakh. If the house is given on rent, there is no restrictionon this amount. Both co-owners can claim deductions in the ratio of ownership.

QQQQ31313131....)))) MyMyMyMy husbandhusbandhusbandhusband andandandand IIII havehavehavehave jointlyjointlyjointlyjointly takentakentakentaken aaaa homehomehomehome loanloanloanloan.... HeHeHeHe payspayspayspays 75757575 percentpercentpercentpercent ofofofof thethethethe EMIEMIEMIEMI.... WhatWhatWhatWhat willwillwillwill bebebebe ourourourour individualindividualindividualindividual taxtaxtaxtax benefits?benefits?benefits?benefits?

Ans. As you have taken a joint home loan, both of you are eligible for tax exemption for your share of the EMI paid. For claiming income tax deduction, the

EMI amount is divided into the principal and interest components. The repayment of the principal amount of loan is claimed as a deduction under section 80C

of the Income Tax Act up to a maximum amount of Rs. 1lakh individually by each co-owner. The repayment of the interest portion of the EMI is also allowed as

a deduction under section 24 of the Act, which is given under the head income from house property”. In case you are living in the house for which home loan is


a deduction under section 24 of the Act, which is given under the head income from house property”. In case you are living in the house for which home loan is

taken, both of you shall be entitled to deduction in the ratio (3:1) on account of interest on borrowed money up to a maximum of Rs.1.5 lakh individually. If the

house is given on rent, there is no restriction on this amount and both co-owners can claim deduction in the ratio of ownership- 3:1 in your case.

QQQQ32323232....)))) WhatWhatWhatWhat isisisis “Employer“Employer“Employer“Employer Tax”Tax”Tax”Tax” andandandand ““““ TaxTaxTaxTax Reimbursed”Reimbursed”Reimbursed”Reimbursed” shownshownshownshown inininin PayPayPayPay SlipSlipSlipSlip ????

Ans. This is the tax which the Employer bears/pays on behalf of the employee and is calculated based on the average rate basis as per section 192 of the

Income Tax Act on the non-monitory perquisites (Superannuation Contribution, Long Service Award, & Retirement Gift). This “Tax” is called “Employer Tax”.

This “Employer Tax” is shown as negative in the Deduction column of the Pay Slip. eg. Rs. 9,872/- is Income Tax and Rs.1,118/- is shown negative as an

Employer Tax in a the Pay Slip of Mr. X. Then the actual tax deducted from Mr. X is therefore Rs. 8,754/-. The differential amount betwee the Actual Tax and

the average tax is then reimbursed to the employee by grossing up and the is shown as “Tax Reimbursed” under the income head in the Pay Slip. It is gross-

up with the tax payable on it.

QQQQ33333333....)))) WhatWhatWhatWhat areareareare thethethethe taxtaxtaxtax benefitsbenefitsbenefitsbenefits thatthatthatthat IIII cancancancan availavailavailavail ofofofof forforforfor repayingrepayingrepayingrepaying aaaa homehomehomehome loanloanloanloan ????

Ans. You will be eligible to claim both the interest and principal components of your repayment during the year.

� Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 150,000 or the actual interest repaid whichever is lower. (You

can claim this interest only when you are in possession of the house)

� Principal can be claimed up to the maximum of Rs. 100,000 under Section 80C. This is subject to the maximum level of Rs 100,000 across all

80C investments.

� You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of

the same.

QQQQ34343434....)))) CanCanCanCan IIII taketaketaketake advantageadvantageadvantageadvantage ofofofof taxtaxtaxtax benefitsbenefitsbenefitsbenefits fromfromfromfrom aaaa homehomehomehome loanloanloanloan asasasas wellwellwellwell asasasas claimclaimclaimclaim HouseHouseHouseHouse RentRentRentRent AllowanceAllowanceAllowanceAllowance (HRA)(HRA)(HRA)(HRA) ????

Ans. If you have taken a home loan and are still living in a rented place, you will be entitled to:

Page - 10

1) Tax benefit on principal repayment under Section 80C.

2)Tax benefit on interest payment under Section 24

3) HRA benefit

Of course, you can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on

your home is complete, the HRA benefit stops. If you have taken a home loan, got possession of the house, have rented it out and stay in a

rented accommodation, you will be entitled to all the three benefits mentioned above. However, in this case, the rent you receive would beconsidered as your taxable income.

QQQQ35353535....)))) IIII havehavehavehave aaaa homehomehomehome loanloanloanloan inininin whichwhichwhichwhich IIII amamamam aaaa cocococo----applicantapplicantapplicantapplicant.... However,However,However,However, thethethethe totaltotaltotaltotal EMIEMIEMIEMI amountamountamountamount isisisis paidpaidpaidpaid bybybyby memememe.... WhatWhatWhatWhat isisisis thethethethe totaltotaltotaltotal incomeincomeincomeincome taxtaxtaxtax exemptionexemptionexemptionexemption thatthatthatthat IIII cancancancan

availavailavailavail ofofofof ????

Ans. Yes, you can claim income tax exemption if you are a co applicant in a housing loan as long as you are also the owner or co owner of the

property in question. If you are only person repaying the loan, you can claim the entire tax benefit for yourself (provided you are an owner or co-

owner). You should enter into a simple agreement with the other borrowers stating that you will be repaying the entire loan. If you are paying

part of the EMI, you will get tax benefits in the proportion to your share in the loan.

QQQQ36363636....)))) IIII havehavehavehave twotwotwotwo housinghousinghousinghousing loansloansloansloans onononon twotwotwotwo differentdifferentdifferentdifferent propertiespropertiespropertiesproperties.... CanCanCanCan IIII getgetgetget taxtaxtaxtax rebaterebaterebaterebate underunderunderunder secsecsecsec 80808080 CCCC forforforfor bothbothbothboth thethethethe loans?loans?loans?loans?

Ans. Yes, you can get the 80C benefit on both loans. However, the total principal amount that you will be entitled to will be a total of Rs .100,000

across both the homes. The interest paid on a home loan is not directly deductible from your salary income for either of your flat loans. Income

from house property will be calculated for each flat you own. If either of theses calculations shows a loss, this loss can be set off against your


from house property will be calculated for each flat you own. If either of theses calculations shows a loss, this loss can be set off against your

income from other heads. As for Section 24 deduction, on your self occupied house you can take advantage of interest payments up to

Rs.1,50,000. For the other property, you can claim actual interest repaid, there is no limit for the same.

Things you must Know about tax benefits on home loan

1. Home loan borrowers are entitled to tax benefits under Section 80C and Section 24 of the Income Tax Act. These can be claimed by the

property’s owner.

2. In the case of co-owners, all are entitled to tax benefits provided they are co-borrowers for the home loan too. The limit applies to each co-

owner.

3. A co-owner, who is not a co-borrower, is not entitled to tax benefits. Similarly, a co-borrower, who is not a co-owner cannot claim benefits.

4. Housing companies usually require all co-owners to be joint borrowers to a home loan. Loan providers specify who can be a joint borrower

for a home loan.

5. The tax benefit is shared by each joint owner in proportion to his share in the home loan. It’s important to establish the share for each co-

borrower to claim tax benefits.

6. The certificate issued by the housing loan company, showing the split between principal and interest for the EMIs paid, is required for

claiming tax benefits.

Q37.) Hw to Calculate the Income Tax Exemption on House Rent Allowance (HRA) ?Q37.) Hw to Calculate the Income Tax Exemption on House Rent Allowance (HRA) ?Q37.) Hw to Calculate the Income Tax Exemption on House Rent Allowance (HRA) ?Q37.) Hw to Calculate the Income Tax Exemption on House Rent Allowance (HRA) ?

Ans. House Rent Allowance (HRA) paid to you as a part of your Flexi Allowance and you are eligible for an Income Tax exemption under Section

10(13A) of the Income Tax Act. The calculation of the exemption amount is as follows:

1. Actual house rent allowance received from your employer .

2. Actual house rent paid by you minus 10% of your basic salary.

3. 50% of your basic salary if you live in a metro or 40% of your basic salary if you live in a non-metro

Page - 11

This minimum figure is allowed as income tax exemption on house rent allowance. It’s prudent to work this out so that you can structure the

other components of your variable pay better eg.: A’’s Basic is Rs.50,000/-.Actual house rent paid is Rs.70,000/-. He has allocated Rs.

30,000/- towards HRA from Flexi. (1) Actual HRA received is Rs.30,000/-, (2) Actual HRA Rs.70,000/- minus 10% of Basic Rs.5,000/- is

equal to Rs.65.000/- and (3) 50% of Basic is Rs.25,000/-. Hence the minimum figure is allowed income tax exemption is Rs.25,000/-

Q38.) Q38.) Q38.) Q38.) How perquisite in respect of accommodation is calculatedHow perquisite in respect of accommodation is calculatedHow perquisite in respect of accommodation is calculatedHow perquisite in respect of accommodation is calculated????

Ans. For purpose of valuation of the perquisite of unfurnished accommodation, would be at prescribed rates, as discussed below:

Α Where the accommodation provided to the employee is owned by the employer, the rate is

1. 15% of ‘Gross Taxable Income - GTI' in cities having population exceeding 25 lakh as per the 2001 census.

2. The rate is 10% of Gross Taxable Income in cities having population exceeding 10 lakhs but not exceeding 25 lakhs as per 2001

Census.

3. For other places, the perquisite value would be 7and 1/2% of the Gross Taxable Income.

B Where the accommodation so provided is taken on lease/ rent by the employer, the prescribed rate is 15% of the salary (Total Taxable

Income) or the actual amount of lease rental payable by the employer, whichever is lower, as reduced by any amount of rent paid by the

employee.

QQQQ39393939....)))) HowHowHowHow perquisiteperquisiteperquisiteperquisite inininin respectrespectrespectrespect ofofofof HolidayHolidayHolidayHoliday HomeHomeHomeHome calculatedcalculatedcalculatedcalculated ????


QQQQ39393939....)))) HowHowHowHow perquisiteperquisiteperquisiteperquisite inininin respectrespectrespectrespect ofofofof HolidayHolidayHolidayHoliday HomeHomeHomeHome calculatedcalculatedcalculatedcalculated ????

Ans. The expenses incurred annually for the rent for company leased holiday home will divided by 365 days and multiplied by no of days occupied

by the employee minus the amount recovered from the employee.

No perquisite will be applicable for company owned holiday home ( such as Walvan - Lonavala)

e.g.suppose Mr. A has stayed in a company own holiday home for 10 days. The expenses incurred for annual maintenance of that holiday

home is say Rs.3,00,000/-. So, the daily maintenance cost will be Rs. 3,00,000/365 i.e. Rs.821.92. And the maintenance cost for 10 days is

Rs.8,220/- (approx.). The amount paid by the employee for staying 10 days is say, Rs.1,000/- Hence the perquisite value for that holiday home

will be Rs.(8,220-1,000)/- = Rs.7,220/-. This amount will be added as perquisite in Total Income. In case of Holiday Home taken as companyleased basis then the compensation to the owner paid will be considered for calculation of perquisite value.

QQQQ40404040....)))) WhatWhatWhatWhat isisisis IncomeIncomeIncomeIncome TaxTaxTaxTax RateRateRateRate ????

Ans. As per the Finance Act, 2013, income-tax is required to be deducted under Section 192 of the Income-tax Act 1961 from income chargeable

under the head “Salaries” for the financial year 2013-2014 (i.e. Assessment Year 2014-2015) at the rates given in the next page :

Page - 12

Latest Income tax slabs for FY 2013-2014

Income Tax RateUpto 200,000 Nil

200,000 to 500,000 10% of the amount exceeding 200,000

500,000 to 1,000,000 Rs.30,000 + 20% of the amount exceeding 500,000

1,000,000 & above Rs.130,000 + 30% of the amount exceeding 1,000,000

For Individuals below 60 years age (including Woman Assessee):

Income Tax Rate

Upto 250,000 Nil

250,000 to 500,000 10% of the amount exceeding 250,000


For Individuals aged 60 years and above but below 80 years (Senior Citizen):




Income Tax Rate

Upto 500,000 Nil

500,000 to 1,000,000 20% of the amount exceeding 500,000


For Individuals aged 80 years and above (Very Senior Citizen):

Tax Credit: Rs. 2,000 for every person whose income doesn’t exceed Rs. 500,000

Surcharge on Income Tax: 10% of the Income Tax payable, in case the total taxable income exceeds Rs.10,000,000. Surcharge

shall not exceed the amount of income that exceeds Rs.10,000,000.

Education Cess: 3% of Income Tax plus Surcharge

QQQQ1111....)))) WhatWhatWhatWhat isisisis ProvidentProvidentProvidentProvident FundFundFundFund andandandand whowhowhowho cancancancan becomebecomebecomebecome membersmembersmembersmembers ofofofof TheTheTheThe TataTataTataTata PowerPowerPowerPower ConsolidatedConsolidatedConsolidatedConsolidated ProvidentProvidentProvidentProvident Fund?Fund?Fund?Fund?

Ans. It is a welfare scheme aimed to provide social security to the employees when they retire from their service. The Provident Fund Scheme

inculcates amongst the employees a spirit of savings while they are gainfully employed and makes provision for benefit after their retirement

and also secures benefits during old age. Its benefit does not end here– it extends to the family members after the death of the employee.

All employees on rolls of The Tata Power Company Limited are required to become members of this Fund.

QQQQ2222....)))) FromFromFromFrom whichwhichwhichwhich datedatedatedate isisisis thethethethe membershipmembershipmembershipmembership ofofofof employeesemployeesemployeesemployees effective?effective?effective?effective?

Ans. An employee is eligible for membership from the day he joins the establishment.

QQQQ3333....)))) WhoWhoWhoWho manages/controlsmanages/controlsmanages/controlsmanages/controls TheTheTheThe TataTataTataTata PowerPowerPowerPower ConsolidatedConsolidatedConsolidatedConsolidated ProvidentProvidentProvidentProvident Fund?Fund?Fund?Fund?

Ans. The Board of Trustees comprising the representative of the management and employees manages the fund. The Board of trustees shall

delegate powers to officials of the establishment for performance of various functions on its behalf under the rules of The Tata Power

Consolidated Provident Fund

QQQQ4444....)))) WhatWhatWhatWhat doesdoesdoesdoes thethethethe ProvidentProvidentProvidentProvident FundFundFundFund comprisecomprisecomprisecomprise of?of?of?of?

Ans. The Provident Fund comprises of :

1. Employee’s contribution @12% of basic pay and dearness allowance.

2. Equivalent contribution made by the company. Out of which 8.33% of basic pay and dearness allowance (DA & ADA) up to a maximum

of Rs. 541/- goes to employees pension scheme and the balance amount remains in the Fund as employer’s contribution in the

Section II (Provident Fund FAQs)Section II (Provident Fund FAQs)Section II (Provident Fund FAQs)Section II (Provident Fund FAQs)


of Rs. 541/- goes to employees pension scheme and the balance amount remains in the Fund as employer’s contribution in the

member’s account.

3. Voluntary Contributions made by the employee.

Q5.) What is Voluntary Contribution?Q5.) What is Voluntary Contribution?Q5.) What is Voluntary Contribution?Q5.) What is Voluntary Contribution?

Ans. A member may, if he so desire, voluntarily contribute an amount at a specified rate not exceeding 100% of his salary less compulsory

contribution made to Provident Fund during that year subject to the condition that the employer shall not be under an obligation to pay a like

amount to the credit of the member's account in respect of such voluntary contributions. It also should keep in mind so that the total deduction

should not exceed in such the take home salary may not be less than the 50% of Gross salary as per the Payment of Wages Act Such

contributions qualify for deduction from Income Tax u/s 80C of the I.T Act. Voluntary contributions also earn interest at the same rate as on

statutory contributions and for all purposes are treated as members own contribution.

Q6.) How does the fund grow?Q6.) How does the fund grow?Q6.) How does the fund grow?Q6.) How does the fund grow?

Ans. All the contributions to the Provident Fund are judiciously invested by Trustees of the Fund in various securities strictly in line with the pattern

as per instruction of the Government from time to time. Interest earned on the fund is annually credited to the member’s account individually.

The interest is calculated on the monthly running balance.

QQQQ7777....)))) IsIsIsIs employeeemployeeemployeeemployee thethethethe onlyonlyonlyonly beneficiarybeneficiarybeneficiarybeneficiary ofofofof thethethethe fund?fund?fund?fund?

Ans. Benefit will be paid to the employee and in his/her absence to his/her family/nominee.

Page - 14

Q8.) What is nomination?Q8.) What is nomination?Q8.) What is nomination?Q8.) What is nomination?

Ans. On the date of joining the company a member should make a nomination in the Nomination Declaration Form, to confer the right to receive the amount

that may stand to his credit in the fund in the event of his/her death. A member can nominate more than one person (even if a minor) & in his nomination

distribute the amount that may stand to his credit in the fund amongst his nominees at his own discretion. If at the time of making a nomination the member

has no family, the nomination may be in favour of any person or persons but if the member subsequently acquired a family, such nomination shall forthwith

be deemed to be invalid A fresh nomination shall be made by the member on his marriage and any nomination made before such marriage shall be deemed

to be invalid. A member may at any time modify a nomination.

Q.9.) How long is the money retained in the fund?Q.9.) How long is the money retained in the fund?Q.9.) How long is the money retained in the fund?Q.9.) How long is the money retained in the fund?

Ans. The accumulations in the Provident Fund are retained in the fund till superannuation / resignation / discharge/death of the member and the PF is

settled/transferred only on obtaining an application from the employee/Form 13 from the newly joined establishment for transfer.

Q10.) What does Family mean?Q10.) What does Family mean?Q10.) What does Family mean?Q10.) What does Family mean?

Ans. Family means: - In case of a male member, the wife, his children, whether married or unmarried, and dependent parents of the member, and the widow and

children of a deceased son of the member. In case of a female member, her husband, her children whether married or unmarried, her dependent parents, her

husband’s dependent parents and her deceased son’s widow and children.

QQQQ11111111....)))) WhatWhatWhatWhat isisisis BoardBoardBoardBoard ofofofof Trustees?Trustees?Trustees?Trustees?


Ans. The Board of Trustees is a group of people who will be responsible for and accountable to the Employees Provident Fund Organization & should act

according to the directions as might be given by the Central Provident Fund Commissioner or by the Central Government from time to time.

QQQQ12121212....)))) IsIsIsIs itititit possiblepossiblepossiblepossible totototo drawdrawdrawdraw moneymoneymoneymoney fromfromfromfrom ProvidentProvidentProvidentProvident FundFundFundFund whilewhilewhilewhile inininin service?service?service?service?

Ans. Yes, The Provident Fund rules provide for refundable and non-refundable withdrawals from Provident Fund while in service for specific purposes. Since it’s a

fund for providing future security during old age, a member should refrain from withdrawing money from the fund for general purpose.

QQQQ13131313....)))) WhatWhatWhatWhat areareareare thethethethe specificspecificspecificspecific purposespurposespurposespurposes forforforfor whichwhichwhichwhich loansloansloansloans fromfromfromfrom thethethethe fundfundfundfund areareareare possible?possible?possible?possible?

Ans. Withdrawals or Loans from Provident Fund fall into two categories. That is Refundable and Non Refundable.

Refundable Loans are available for the following 3 purposes:

1. Religious Ceremony: To pay expenses in connection with funerals or ceremonies which by religion of the employee it is incumbent upon him to

perform.

2. Post Matriculation Education: To pay the cost of higher education, where necessary the travelling expenses of any child of the employee actually

dependent on him in the following cases:

1) Education outside India for academic, technical, professional or vocational courses beyond the matriculation stage and

2) Any medical, engineering or other technical or specialized course in India beyond the matriculation stage.

Page - 15

3. Illness: for cases of :

a) Hospitalization lasting for one month or more or

b) Major surgical operation in a hospital or

c) Suffering from TB, Leprosy, Paralysis, Cancer, mental derangement or heart ailment or any other illness having been granted leave by the

employer for the said illness.

QQQQ14141414....)))) WhatWhatWhatWhat areareareare thethethethe maximummaximummaximummaximum limitslimitslimitslimits upupupup totototo whichwhichwhichwhich thethethethe refundablerefundablerefundablerefundable advances/loanadvances/loanadvances/loanadvances/loan areareareare permissible?permissible?permissible?permissible?

Ans. Religious Ceremony – 3 times basic salary (for management employees) / 3 times basic + Dearness Allowance (DA) + Additional DA(for non

management employees) OR members own contribution (PF + VPF – with interest thereon) whichever is lesser. The amount will be recovered in 24

equal monthly installments.

Post Matriculation Education - 3 times basic salary (for management employees) / 3 times basic + DA + Additional DA (for non management

employees) OR members own contribution (PF + VPF – with interest thereon) whichever is lesser. The amount will be recovered in 24 equal monthly

installments.

Illness – 6 times basic salary (for management employees) / 6 times basic + DA + Additional DA(for non management employees) OR members own

contribution (PF + VPF – with interest thereon) whichever is lesser. The amount will be recovered in 24 equal monthly installments.

QQQQ15151515....)))) WhatWhatWhatWhat areareareare thethethethe conditionsconditionsconditionsconditions forforforfor grantgrantgrantgrant ofofofof refundablerefundablerefundablerefundable advances?advances?advances?advances?

1. The Board of Trustees may on an application along with the specific evidences (as listed out separately in the checklist from a member grant


1. The Board of Trustees may on an application along with the specific evidences (as listed out separately in the checklist from a member grant

refundable advance as per the eligibility criteria for the purpose applied for .

2. No such advance shall be granted unless the concerned member has completed one year of service and the Board of Trustees is satisfied that the

member’s pecuniary circumstances justify it and that the amount advanced will be spent on the purpose for which it is given.

3. The advances shall be recovered from the salary/wages of the concerned member in equal monthly installments, the tenure of recovery being as per

the purpose for which the refundable loan has been taken. The Board of Trustees may also accept any outstanding amount as a one-time payment

from the member either through salary or through a bank draft. The part payment of outstanding may also be accepted.

4. Interest may be recovered on the amount/reducing balance at the rate of 1% above the distribution rate.

5. Recovery of advance shall commence from the second monthly payment of salary made after the drawl of advance.

6. Consecutive refundable advances shall be granted only on full recovery of the advance already made.

QQQQ16161616....)))) WhatWhatWhatWhat areareareare thethethethe specificspecificspecificspecific purposespurposespurposespurposes forforforfor whichwhichwhichwhich NonNonNonNon----RefundableRefundableRefundableRefundable loan/withdrawalsloan/withdrawalsloan/withdrawalsloan/withdrawals fromfromfromfrom thethethethe fundfundfundfund isisisis possible?possible?possible?possible?

Ans. Non-refundable withdrawals are allowed for the following purposes:

1) Purchase / Construction of House & Purchase of Site

2) Additions / Alterations to House

3) Marriage / Post Matriculation Education & Illness

4) To repay loan taken from outside agency

5) Withdrawal within one year of retirement (advance against dues – 90%)

6) Financing of Member’s Life Insurance Policies (LIC)

7) Physical Handicap & On dismissal

Page - 16

QQQQ17171717....)))) WhatWhatWhatWhat areareareare thethethethe conditionsconditionsconditionsconditions totototo bebebebe fulfilledfulfilledfulfilledfulfilled forforforfor thethethethe variousvariousvariousvarious purposespurposespurposespurposes forforforfor whichwhichwhichwhich nonnonnonnon----RefundableRefundableRefundableRefundable loansloansloansloans areareareare granted?granted?granted?granted?

Ans. 1) PURCHASE / CONSTRUCTION OF HOUSE

– The member has to complete five years membership of the Fund.

– The member’s own share of contribution along with interest thereon in the amount standing to his credit in the Fund is not less than one

thousand rupees.

– Loan can be granted only if the member owns the house / dwelling site either singly or jointly with the spouse and no other member of the

family is allowed.

Documents required to be submitted as per Check List

2)PURCHASE OF SITE

Same as point no 1.

3) ADITION / ALTERATION TO HOUSE

– The member has to complete five years membership to the Fund.

– The member’s own share of contribution along with interest thereon in the amount standing to his credit in the Fund is not less than one

thousand rupees.

– An additional withdrawal for additions / alterations is permissible after 10 years of the first withdrawal.



4) MARRIAGE / POST MATRICULATION EDUCATION:

− Member should have completed 7 years of membership to the Fund

− The amount of his own share of contribution with interest thereon standing to his credit in the Fund is Rupees One Thousand or more.


5) ILLNESS:

A member may be allowed non-refundable advance from his account in the fund for himself or for the treatment of a member of his family in

cases of:

a) Hospitalization lasting for one month or more or

b) Major surgical operation in a hospital or

c) Suffering from TB, Leprosy, Paralysis, Cancer, mental derangement or heart ailment or any other illness having been granted leave by the

employer for treatment of the said illness

Documents required as per Check List

6) TO REPAY LOAN TAKEN FROM AN OUTSIDE AGENCY:

On an application from a member the Trustees can sanction from amount standing to the credit of the member in the Fund a non refundable

withdrawal for the repayment wholly or partly of any outstanding principal and interest of a loan obtained in the name of the member or spouse

of the member or jointly by the member and spouse from a State Government, registered co-operative society, State Housing Board,

Nationalized Banks, Public Financial Institutions, Municipal Corporation or a body similar to the Delhi Development Authority solely for the

purpose of loan taken for purchase / construction of house or purchase of site.

The member has completed 10 years of membership to the Fund.

The members own share of contribution with interest thereon in the amount standing to his credit in the Fund, is one thousand Rupees or more.


Page - 17

7) WITHDRAWAL WITHIN ONE YEAR OF RETIREMENT (ADVANCE AGAINST DUES – 90%)

The Trustees or where so authorized by the Trustees, any officer subordinate to them, may on an application from a member in such form as may be

prescribed permit withdrawal of upto 90% of the amount standing to his credit, at any time after attainment of the age of 54 years by the member or

within one year before his actual retirement on superannuation whichever is later. Document required as per Check List

8) FINANCING OF MEMBER’S LIFE INSURANCE POLICIES (LIC)

Where a member desires that premium due on policy of Life Insurance taken by him or his own life should be financed from his Provident Fund

Account, he may apply in such form and in such manner as may be prescribed by the Trustees. Provided that no such payment shall be made unless

the premium is payable yearly. No payment shall be made unless the members own contribution in his Provident Fund account with interest thereon

is sufficient to pay the premium and where the payment is to be made on the first premium, sufficient to pay the premium for two years. No payment

shall be made towards a policy unless it is legally assignable by the member to the Fund The Trustees shall before making payment in respect of

existing policies, satisfy by reference to the Life Insurance Corporation that no prior assignment of the policy exits and the policy is free from all

encumbrances. No educational endowment policy or marriage endowment policy shall be financed from the Fund. If such policy is due for payment

in whole or in part before the member attains the age of 55 years.

9) PHYSICAL HANDICAP

A member who is physically handicapped, may be allowed a non-refundable advance from his account in the Fund, for purchasing an equipment

required to minimize the hardship on account of handicap. Documents required as per Check List

10) ON DISMISSAL

In case a member is discharged or dismissed or retrenched by the employer and such discharge or dismissal or retrenchment is challenged by the

member and the cases are pending in a court of law, an officer authorized by the Board of Trustees may on an application from the member in form

as may be prescribed authorize payment to him of one or more non recoverable advances from his Provident Fund Account not exceeding 50% of his


as may be prescribed authorize payment to him of one or more non recoverable advances from his Provident Fund Account not exceeding 50% of his

own share of contribution with interest thereon standing to his credit in the Fund on the date of such authorization.


QQQQ18181818....)))) WhatWhatWhatWhat areareareare thethethethe maximummaximummaximummaximum limitslimitslimitslimits upupupup totototo whichwhichwhichwhich thethethethe nonnonnonnon----refundablerefundablerefundablerefundable advances/loansadvances/loansadvances/loansadvances/loans areareareare permissiblepermissiblepermissiblepermissible

Ans. 1) Purchase / Construction of House: The withdrawal shall not exceed the members basic wages and dearness allowance for 36 months OR the

members own share of contributions (including VPF) together with the employer’s share of contributions with interest thereon OR the total cost

of construction / total cost of ready built house of flat, whichever is the least. The house is owned by the member or jointly only with the spouse.

No other family member can be joint owner. Eligibility only for 1 time withdrawal during the tenure of service

2) Purchase of Site for construction of house: The amount of withdrawal shall not exceed the member’s basic wages and dearness allowance for

24 months or the members own share of contributions, together with the employers share of contributions with interest thereon or the actual cost

towards the acquisition of the dwelling site, whichever is the least. The site is owned by the member or jointly only with the spouse. No other

family member can be joint owner. Eligibility only for 1 time withdrawal during the tenure of service.

3) Additions / Alterations to House: The amount of withdrawal shall be upto 12 months basic wages and DA or the members own share of

contributions with interest thereon in the amount standing to his credit in the Fund whichever is less. The withdrawal shall be permissible only

after a period of 5 years from the date of completion of the dwelling house. A further withdrawal upto 12 months basic wages and DA or the

members own share of contributions with interest thereon in the amount standing to his credit in the Fund whichever is least may be granted for

addition / alterations owned by the member or by the spouse of jointly by the member and the spouse after ten years of first withdrawal.

4) Marriage / Post Matriculation Education: The withdrawal shall not exceed fifty per cent of his or her own share of contribution, with interest

thereon, standing to his or her credit in the fund on the date of such authorization, for his or her own marriage, the marriage of his or her

daughter, son, sister or brother or for the post-matriculation education of his or her son or daughter. Not more than 3 advances shall be

admissible to a member under this rule.

Page - 18

5) Illness: The amount of withdrawal shall not exceed the members basic wages and dearness allowance for 6 months or his own share of

contribution with interest in the Fund, whichever is less.

6) To repay loan taken from outside agency:

The amount of withdrawal shall not exceed the members basic wages and DA for thirty six months or his own share of contributions together with

the employers share of the contributions with interest thereon, in the members account in the Fund or the amount of outstanding principal and

interest of the said loan whichever is least.

7) Withdrawal within one year of retirement (advance against dues – 90%)

The amount of withdrawal shall be upto 90% of the amount standing to the members credit

8) Financing of Member’s Life Insurance Policies (LIC)

The payment shall be made out of and debited to the members own contribution with interest thereon standing to his credit in the fund.

9) Physical Handicap:

The amount advanced under this shall not exceed the members basic wages and dearness allowance for 6 months or his own share of

contribution with interest thereon or the cost of the equipment whichever is less.

10) On dismissal

Trustees may allow on an application from the member in form as may be prescribed authorize payment to him of one or more non recoverable

advances from his Provident Fund Account not exceeding 50% of his own share of contribution with interest thereon standing to his credit in the

Fund on the date of such authorization.


Fund on the date of such authorization.

QQQQ19191919....)))) WhenWhenWhenWhen thethethethe finalfinalfinalfinal withdrawalwithdrawalwithdrawalwithdrawal cancancancan bebebebe made?made?made?made?

Ans. Provident Fund accumulations can finally be withdrawn on:-

1. Superannuation after attaining the age of 60 years / Voluntary Retirement.

2. Discharge/Dismissal/Resignation/Retrenchment/Termination.

3. Death.

4. Permanent and total incapacity for work.

5. On closure of the establishment.

6. On transfer to other establishment – after receiving FORM 13 from the present employer.

Other conditions for final withdrawal?

1. 90% of the P.F Accumulation can be withdrawn within 1 (one) year before retirement. (To be included in the Non-Refundable Loan Rules)

2. Any amount becoming due to a member as a result of supplementary contribution from the employer in respect of leave wages / arrear wages

/ installment of arrear contribution, in respect of a member whose claim has been settled on account is to be remitted to the latest address.

3. Accumulation in respect of any member who has either ceased to be employed or died, but no claim has been made within a period of 3

(three) years from the date it becomes payable, or if any amount remitted to a person, is received back undelivered, and it is not claimed

again within a period of three years from the date it becomes payable, shall be transferred to an account to be called the “Unclaimed Deposit

Account”

Page - 19

Mode of Payment:

a) Postal Money order,

b) Account Payee cheque in any scheduled bank

c) By transfer to payee’s name in the form of annuity term deposit scheme of any nationalized bank.

d) By electronic transfer directly to member’s account.

QQQQ20202020....)))) IsIsIsIs thethethethe finalfinalfinalfinal withdrawalwithdrawalwithdrawalwithdrawal freefreefreefree ofofofof IncomeIncomeIncomeIncome Tax?Tax?Tax?Tax?

Ans. TDS is deducted on Interest exceeding Rs 5000/- for the period commencing from the date of retirement/resignation to the date of settlement at

the prevailing rates

QQQQ21212121....)))) IsIsIsIs thethethethe ProvidentProvidentProvidentProvident FundFundFundFund AccumulationAccumulationAccumulationAccumulation TaxTaxTaxTax freefreefreefree ifififif anananan employeeemployeeemployeeemployee retires/resignsretires/resignsretires/resignsretires/resigns fromfromfromfrom thethethethe organizationorganizationorganizationorganization afterafterafterafter servingservingservingserving 4444 yearsyearsyearsyears 6666 months?months?months?months?

Ans. It is taxable and rate is applicable as per sec 192 of I T Act.

QQQQ22222222....)))) WhatWhatWhatWhat specialspecialspecialspecial provisionsprovisionsprovisionsprovisions areareareare applicableapplicableapplicableapplicable forforforfor membersmembersmembersmembers resigningresigningresigningresigning fromfromfromfrom thethethethe company?company?company?company?

Ans. When a member resigns from the service of the Company, if he takes up employment with any Company covered under Employees’ Provident

Fund Act, such members’ provident fund accumulations are transferred to the new employer and are not paid to the member.

However, if the member does not secure employment within two months after leaving service with the Company, such member can withdraw the


However, if the member does not secure employment within two months after leaving service with the Company, such member can withdraw the

provident fund on furnishing a declaration that he is not employed

QQQQ23232323....)))) CanCanCanCan thethethethe ProvidentProvidentProvidentProvident FundFundFundFund ofofofof aaaa membermembermembermember fromfromfromfrom hishishishis exexexex----employeremployeremployeremployer bebebebe transferred?transferred?transferred?transferred?

Ans. Yes; if the rules of the provident fund of the ex-employer permit such transfer Form No. 13A is to be filled up in duplicate duly filled in all respect

and given to PF section at Carnac.

QQQQ24242424....)))) WhatWhatWhatWhat isisisis thethethethe raterateraterate ofofofof interestinterestinterestinterest givengivengivengiven totototo members?members?members?members?

Ans. The Central Government declares the rate of interest to be credited to the accounts of Provident Fund members annually. Any interest paid in

excess of the statutory rate will be treated as perquisites.

The rate of interest credited to the members account should not be lower than the statutory rate of interest declared by the Central Government

under para 60 of the E.P.F. Scheme, 1952 and shortfall, if any, shall be made good by the Company.

QQQQ25252525....)))) WhatWhatWhatWhat willwillwillwill happenhappenhappenhappen whenwhenwhenwhen theretheretherethere isisisis nononono claimclaimclaimclaim ofofofof finalfinalfinalfinal withdrawalwithdrawalwithdrawalwithdrawal fromfromfromfrom ProvidentProvidentProvidentProvident fundfundfundfund orororor nononono applicationapplicationapplicationapplication receivedreceivedreceivedreceived forforforfor transfertransfertransfertransfer ????

Ans. If no application for PF withdrawal or transfer has been preferred within 36 months from the date of separation, the account shall be treated as an

inoperative account and interest shall not be credited to the account of the member from the date on which it has become inoperative (i.e. after 36

months).

Page - 20

CHECKLIST OF DOCUMENTS REQUIRED FOR PROVIDENT FUND LOANS

REFUNDABLE LOANS

Refundable loans from Provident Fund are available for 3 purposes: 1) Religious Ceremony, 2) Education & 3) Illness

Religious Ceremony:

Duly filled application form on a plain paper requesting for loan for religious ceremony mentioning the date and amount.

Education:

Duly filled application form; Copies of Fee Receipts, Coaching class receipts, text books. If dependent is going abroad for studies, admission receipt, fee

receipts, copies of air tickets

Illness:

Duly filled application form; Certificate from Doctor or Hospital recommending stay of one month in hospital for treatment or surgery

NON REFUNDABLE LOANS

Non Refundable loans from Provident Fund are available for the purposes: 1) Purchase / Construction of House 2) Purchase of Site 3) Additions / Alterations

to House 4) Marriage / Post Matriculation Education 5) Illness 6) To repay loan taken from outside agency 7) Withdrawal within one year of retirement

(advance against dues – 90%) 8) Financing of Member’s Life Insurance Policies (LIC) 9) Physical Handicap 10) On dismissal

Purchase / Construction of House:

Purchase of flat from Builder / Developer

�Duly filled application form

�Agreement for sale duly registered with stamp duty paid

�Receipt of Registration of Agreement


�Receipt of Registration of Agreement

�Title clearance certificate (if not included in the sale agreement)

�Floor plan indicating the flat, area and location

�Letter regarding present state of construction

�Receipts of payments made to the Builder / Developer

Purchase of re-sale flat in Registered Society


�Agreement for sale between buyer and seller duly registered with stamp duty paid

�Receipt of Registration

�NOC from the Society / Builder for sale / transfer of flat

�Copy of both sides of Share Certificate

�Receipts of payments made to the seller

�Floor plan indicating the flat, area and location

Construction of House


�Document regarding ownership of land i.e. 7/12 extract or P R card in the name of the applicant

�Building plan duly approved by the Competent Authority

�The certificate from Architect/Civil Engineer/Contractor regarding estimated cost of the proposed construction

�Commencement certificate from the Competent Authority

Page - 21

Purchase of Site:


�7/12 extract of P.R. Card in the name of Vendor regarding the plot to be purchased

�Non-Agricultural permission from the Collector or certificate from the Competent Authority certifying that the plot is converted for Non-Agricultural use

�Location plan indicating the plot to be purchased

�Agreement between buyer and seller duly registered with stamp duty paid

�Registration receipt & Receipt of payments made to the seller

Additions / Alterations to House:


�Proof that house/building is 5 years old and above (agreement copy, maintenance bill, electricity bill 5 years old and above)

�Proof that house is currently in employee name (maintenance bill, electricity bill) & Original estimate from contractor

Marriage \ Post Matriculation Education:

Marriage:

Duly filled application form & Original Invitation Card

Post Matriculation Education:

�Duly filled application form , copies of Fee Receipts, Coaching class receipts, text books. If dependent is going abroad for studies, admission receipt, fee

receipts, copies of air tickets.

Illness:

�Duly filled application form & Certificate from Doctor or Hospital recommending stay of one month in hospital for treatment or surgery

To repay loan taken from outside agency (only for housing loans):


�Letter from financial institution stating the loan has been sanctioned for the purpose of housing.


�Letter from financial institution stating the loan has been sanctioned for the purpose of housing.

�Letter should mention the outstanding amount along with interest payable & Agreement copy

Withdrawal within 1 year of retirement (Advance against dues 90%)


�Undertaking on Re.100/- stamp paper for peaceful vacation of quarters (if employee is staying in Cos. Quarters or Co’s. Leased Accommodation)

�If employee is not staying in Cos. Quarters or Cos. Leased Accommodation, application on plain paper stating the same.

LIC Premium payment:


�Letter from LIC indicating the premium amount payable yearly

�Letter from LIC that no prior assignment of the policy exists and the policy is free from all encumbrances

Physical Handicap:


�Doctor’s certificate that the employee is physically handicapped

On Dismissal:


�Application from dismissed employee for advance against Provident Fund

Page - 22

QQQQ1111....)))) IfIfIfIf gratuitygratuitygratuitygratuity isisisis receivedreceivedreceivedreceived fromfromfromfrom differentdifferentdifferentdifferent employersemployersemployersemployers inininin thethethethe samesamesamesame year,year,year,year, whatwhatwhatwhat willwillwillwill bebebebe thethethethe ceilingceilingceilingceiling ofofofof exemptionexemptionexemptionexemption ????

Ans. The Ceiling of Rs.10,00,000/- would apply to aggregate of gratuity from one or more employers in the same year in case of retirement or death etc.

QQQQ2222....)))) WhyWhyWhyWhy isisisis GratuityGratuityGratuityGratuity paidpaidpaidpaid ????

Ans. Gratuity payment is made by the employer as a mark of recognition of the service rendered by the employee to the company. This payment also acts as an

incentive for motivating the employee.

QQQQ3333....)))) WhatWhatWhatWhat isisisis thethethethe eligibilityeligibilityeligibilityeligibility forforforfor receivingreceivingreceivingreceiving GratuityGratuityGratuityGratuity ????

Ans. An employee is eligible for receiving gratuity payment only after he has completed 5 years (4 years 6 months) of continuous service. If an employee

working in an establishment where five days working in a week then he should have been worked for one ninety days in a year that will be considered as

full one year and incase of employee working for 6 days in a week he should have worked for two forty days will be considered as full one year.

QQQQ4444....)))) WhatWhatWhatWhat isisisis ContinuousContinuousContinuousContinuous Service?Service?Service?Service?

Ans. An employee is said to be in continuous service for a period, when he has provided uninterrupted service during that period. However, interruption on

account of :Sickness, Accident, Leave, Lay-off, Strike, lock-out, cessation of work not due to any fault of the employee. In case of female, maternity leave

not exceeding 12 weeks will not be considered as a break in service.

Section III (Gratuity FAQs)Section III (Gratuity FAQs)Section III (Gratuity FAQs)Section III (Gratuity FAQs)


QQQQ5555....)))) IfIfIfIf anananan IndividualIndividualIndividualIndividual receivesreceivesreceivesreceives RetirementRetirementRetirementRetirement GratuityGratuityGratuityGratuity fromfromfromfrom moremoremoremore thanthanthanthan oneoneoneone employer,employer,employer,employer, areareareare bothbothbothboth thethethethe amountsamountsamountsamounts exemptexemptexemptexempt fromfromfromfrom tax?tax?tax?tax?

Ans. Where an Individual receives Retirement Gratuity from more than one employer, he can claim exemption in respect of both of them. However, the

maximum amount of exemption should not exceed Rs. 10,00,000/-. Where an employee received retirement gratuity from his employment at the age of 45

years. Subsequently, he joined a new employment and retired from his second employment at the age of 60 years. He received gratuity from the first

employer as well as the second employer. In case of Gratuity received from more than one employer during different period of time, the maximum

exemption claimed by the assesse in his life should not exceed Rs.10,00,000.

QQQQ6666....)))) IfIfIfIf gratuitygratuitygratuitygratuity isisisis receivedreceivedreceivedreceived fromfromfromfrom differentdifferentdifferentdifferent employersemployersemployersemployers inininin thethethethe samesamesamesame year,year,year,year, whatwhatwhatwhat willwillwillwill bebebebe thethethethe ceilingceilingceilingceiling ofofofof exemptionexemptionexemptionexemption ????

Ans. The Ceiling of Rs.10,00,000/- would apply to aggregate of gratuity from one or more employers in the same year in case of retirement or death etc.

QQQQ7777....)))) WhatWhatWhatWhat isisisis EligibilityEligibilityEligibilityEligibility forforforfor receivingreceivingreceivingreceiving GratuityGratuityGratuityGratuity

Ans. An employee is eligible for receiving gratuity payment only after he has completed 5 years of continuous service.

QQQQ8888....)))) HowHowHowHow isisisis GratuityGratuityGratuityGratuity calculatedcalculatedcalculatedcalculated asasasas perperperper GratuityGratuityGratuityGratuity ActActActAct

Ans. If years of service are: i) Upto 5 years “NIL”, ii) Over 5 years;

Gratuity = Last Salary Drawn/month x 15 x No. of Years of service/26

Page - 23

QQQQ9999....)))) HowHowHowHow totototo determinedeterminedeterminedetermine yearsyearsyearsyears ofofofof service?service?service?service?

Ans. While calculating completed years of service, any fraction of the year less than 6 months will be ignored. For instance, if service of retiring employee

is 20 years 10 months and 26 days, 21 years will be taken for this purpose.

QQQQ10101010....)))) WhatWhatWhatWhat isisisis thethethethe maximummaximummaximummaximum amountamountamountamount ofofofof gratuitygratuitygratuitygratuity payablepayablepayablepayable ????

Ans. As per the Gratuity Act, employer has to pay 15 days' salary for each year of service subject to maximum of Rs.10 Lakhs. However, higher limit can

be altered as per the Company Policy.

QQQQ11111111....)))) WhatWhatWhatWhat isisisis thethethethe TaxTaxTaxTax treatmenttreatmenttreatmenttreatment ofofofof GratuityGratuityGratuityGratuity ????

Ans. The gratuity received by an employee, covered by the Payment of Gratuity Act 1972, is exempt from tax to the extent of the least of the following:

1. 15 days salary, based on salary last drawn for every completed year of service or part there of in excess of 6 months

2. Rs.10,00,000/-

3. Gratuity actually received

Gratuity in excess of the above limits is taxable in the hands of the assessee. Any gratuity paid to an employee while in service is not exempt from

tax.

QQQQ12121212....)))) IsIsIsIs ourourourour gratuitygratuitygratuitygratuity paymentpaymentpaymentpayment coveredcoveredcoveredcovered bybybyby GratuityGratuityGratuityGratuity ActActActAct ????


QQQQ12121212....)))) IsIsIsIs ourourourour gratuitygratuitygratuitygratuity paymentpaymentpaymentpayment coveredcoveredcoveredcovered bybybyby GratuityGratuityGratuityGratuity ActActActAct ????

Ans. Our gratuity payment is being made following our own gratuity payment rule which is more favourable then the payment of Gratuity Act.

QQQQ13131313....)))) WhatWhatWhatWhat isisisis thethethethe basisbasisbasisbasis ofofofof lastlastlastlast salarysalarysalarysalary forforforfor calculationcalculationcalculationcalculation ofofofof ourourourour gratuitygratuitygratuitygratuity exemptionexemptionexemptionexemption.... ????

Ans. Last ten months average salary to be considered for calculation of exemption.

QQQQ15151515....)))) WhatWhatWhatWhat isisisis companycompanycompanycompany rulerulerulerule forforforfor GratuityGratuityGratuityGratuity Payment?Payment?Payment?Payment?

Ans.

Page - 24

Tenure of service Officers Union

For service less than 15 years Half (15/26) month’s salary for every

completed year of service

Half (15/26) month’s salary for every


For service greater than or equal to 15 years,

but less than equal to 20 years

Three fourth (3/4) month’s salary for every


Three fourth (3/4) month’s salary for every


For service greater than to 20 years One month’s salary for every completed year

of service

21/26 of the salary for every completed year

of service

QQQQ16161616....)))) IsIsIsIs GratuityGratuityGratuityGratuity aaaa mandatorymandatorymandatorymandatory benefit?benefit?benefit?benefit?

Ans. Yes, every employer employing 10 or more persons must pay gratuity to his employees on leaving service after a minimum of 5 years of

continuous service or in case of death.

QQQQ17171717....)))) WhoWhoWhoWho cancancancan bebebebe thethethethe nominees?nominees?nominees?nominees?

Ans. Nominee can be any one of the immediate family member and the nomination can be in multiple.

QQQQ18181818....)))) HowHowHowHow doesdoesdoesdoes oneoneoneone makemakemakemake aaaa Nomination?Nomination?Nomination?Nomination?

Ans. A member can make an application to the Trustees nominating one or more persons (stating specifically the individual share of each nominee) who

shall have the right to receive the amount of gratuity in the event of his death, before the amount becomes payable, or having become payable, has

not been paid.

QQQQ19191919....)))) WhetherWhetherWhetherWhether employeeemployeeemployeeemployee cancancancan changechangechangechange nominees?nominees?nominees?nominees?

Ans. Yes; Employee can change the nominees during his/her tenure of service by resubmitting the prescribed Form “F’

QQQQ20202020....)))) IsIsIsIs theretheretherethere anyanyanyany specificspecificspecificspecific rulerulerulerule ofofofof GratuityGratuityGratuityGratuity paymentpaymentpaymentpayment forforforfor GroupGroupGroupGroup employees?employees?employees?employees?

Ans. Yes; There is prescribed Group Gratuity Policy needs to follow.


Ans. Yes; There is prescribed Group Gratuity Policy needs to follow.

QQQQ21212121....)))) IsIsIsIs GratuityGratuityGratuityGratuity transferabletransferabletransferabletransferable totototo thethethethe nextnextnextnext employeremployeremployeremployer likelikelikelike ProvidentProvidentProvidentProvident Fund?Fund?Fund?Fund?

Ans. No; it is not transferable except in case of group transfers within TATA Group Companies.

QQQQ22222222....)))) IsIsIsIs GratuityGratuityGratuityGratuity forfeited?forfeited?forfeited?forfeited?

Ans. Misappropriated amount by an employee can be adjusted against his gratuity payable under the Act

QQQQ23232323....)))) HowHowHowHow isisisis oneoneoneone monthmonthmonthmonth determineddetermineddetermineddetermined incaseincaseincaseincase ofofofof anananan employeeemployeeemployeeemployee workingworkingworkingworking inininin anananan establishmentestablishmentestablishmentestablishment forforforfor 22222222 daysdaysdaysdays inininin 1111 monthmonthmonthmonth ????

Ans. An employee working in an establishment for 22 days in a month will be calculated @ 26 days a month.

QQQQ24242424....)))) HowHowHowHow thethethethe gratuitygratuitygratuitygratuity amountamountamountamount isisisis computed?computed?computed?computed?

Ans. Mr. A ‘s Basic is Rs.42,000/-, Period of service is 22 Years; Gratuity Payable is Rs.42,000 X 22 = Rs. 9,24,000/-, Mr. B’s Basic is Rs.55,000/-,

Period of service is 16 Years; Gratuity payable is Rs.55,000 X 0.75 X 16 = Rs.6,69,000/- and Mr. C’s Basic is Rs.23,240/- Period of service is 14

Years; Gratuity payable is Rs.23,240 X 0.58 X 14 = Rs.1,88,708.80 > Rs,1,88,709/-

QQQQ1111....)))) WhatWhatWhatWhat isisisis SuperannuationSuperannuationSuperannuationSuperannuation Fund?Fund?Fund?Fund?

Ans. It is a welfare scheme aimed to provide social security to the employees when they retire from their service. The Superannuation Scheme is a provision

for benefit after their retirement and also secures benefits during old age. Its benefit does not end here – it extends to the family members after the death

of the employee.

QQQQ2222....)))) WhoWhoWhoWho cancancancan becomebecomebecomebecome membersmembersmembersmembers ofofofof TheTheTheThe TataTataTataTata PowerPowerPowerPower CompanyCompanyCompanyCompany LtdLtdLtdLtd.... SuperannuationSuperannuationSuperannuationSuperannuation Fund?Fund?Fund?Fund?

Ans. All confirmed employees on the rolls of The Tata Power Company Limited can become members of the Fund. At the time of joining the employee gets SA

Allowance i.e. 15% of Basic + DA in their Salary till the time they are confirmed, after confirmation they can decide whether they want to join the fund or

continue getting SA Allowance in Salary. If they decide to join the Fund, they will stop getting SA Allowance in Salary and SA contribution will go to the

Fund which will earn interest each year based on the interest declared by LIC of India.

QQQQ3333....)))) FromFromFromFrom whichwhichwhichwhich datedatedatedate isisisis thethethethe membershipmembershipmembershipmembership ofofofof employeesemployeesemployeesemployees effective?effective?effective?effective?

Ans. An employee is eligible for membership from the day he is confirmed and is willing to join the Fund.

QQQQ4444....)))) WhatWhatWhatWhat areareareare thethethethe dutiesdutiesdutiesduties ofofofof anananan employeremployeremployeremployer inininin casecasecasecase ofofofof SuperannuationSuperannuationSuperannuationSuperannuation Scheme?Scheme?Scheme?Scheme?

Ans. The duties of an employer are to maintain the Fund, send the monthly contributions of the Fund to LIC of India on time and submit annual statement to themembers:

Section IV (Superannuation FAQs)Section IV (Superannuation FAQs)Section IV (Superannuation FAQs)Section IV (Superannuation FAQs)


QQQQ5555....)))) WhoWhoWhoWho manages/controlsmanages/controlsmanages/controlsmanages/controls TheTheTheThe TataTataTataTata PowerPowerPowerPower CompanyCompanyCompanyCompany LtdLtdLtdLtd.... StaffStaffStaffStaff SuperannuationSuperannuationSuperannuationSuperannuation Fund?Fund?Fund?Fund?

Ans. The Trustees of the Fund manages the fund. All the decisions are taken by the Trustees after obtaining approval from the Management.

QQQQ6666....)))) HowHowHowHow doesdoesdoesdoes thethethethe SuperannuationSuperannuationSuperannuationSuperannuation FundFundFundFund function?function?function?function?

Ans. Earlier whatever the fund used to receive was invested as per the pattern laid by Finance Ministry and whatever interest was earned from investments was

distributed as interest to the members. Since November 2009 the company has given all the contribution to LIC of India for doing investments and the

proceeds sent to LIC for managing the fund.

QQQQ7777....)))) HowHowHowHow longlonglonglong isisisis thethethethe moneymoneymoneymoney retainedretainedretainedretained inininin thethethethe fund?fund?fund?fund?

Ans. The accumulations in the Fund are retained in the fund till superannuation / resignation / discharge/death of the member and the Superannuation is

settled/transferred only on obtaining an application from the employee.

QQQQ8888....)))) IsIsIsIs employeeemployeeemployeeemployee thethethethe onlyonlyonlyonly beneficiarybeneficiarybeneficiarybeneficiary ofofofof thethethethe fund?fund?fund?fund?

Ans. No the nominee is also beneficiary in case of death of the member while in service.

Page - 26

QQQQ9999....)))) WhatWhatWhatWhat isisisis nomination?nomination?nomination?nomination?

Ans. On the date of joining the company a member should make a nomination in the Nomination Declaration Form, to confer the right to receive the

benefits that may stand to his credit in the fund in the event of his/her death. A member can nominate more than one person (even if a minor) & in his

nomination distribute the amount that may stand to his credit in the fund amongst his nominees at his own discretion. If at the time of making a

nomination the member has no family, the nomination may be in favour of any person or persons but if the member subsequently acquired a family,

such nomination shall forthwith be deemed to be invalid A fresh nomination shall be made by the member on his marriage and any nomination made

before such marriage shall be deemed to be invalid. A member may at any time modify a nomination. If the member has nominated his wife and the

wife dies first, then it is mandatory for the member to change the nomination. Nomination is very important in Superannuation, because after

separation also the Nominee will be the only claimant.

QQQQ10101010....)))) WhenWhenWhenWhen thethethethe finalfinalfinalfinal withdrawalwithdrawalwithdrawalwithdrawal cancancancan bebebebe made?made?made?made?

Ans. When the member separates from the company :

– On Retirement / VRMG / VRS

– On receiving the application from the member, the settlement is done. One-third commutation value is paid to the member and 2/3rd amount to

paid to LIC for purchase of annuity in the name of the member. The member will get pension from LIC till he lives, on his death the capital amount

will be paid to the nominee in lump sum

– On death of a member while in service.

The nominee will be the beneficiary and the settlement will be done similar to retirement settlement.

– On Resignation

The member will not receive the one-third commutation amount if he/she is less than 55 yrs of age. The entire accumulation will be paid to LIC for


The member will not receive the one-third commutation amount if he/she is less than 55 yrs of age. The entire accumulation will be paid to LIC for

purchase of annuity, LIC will in turn pay immediate pension till the member lives. On his death LIC will pay the capital amount back to the nominee

only if he has selected ROC option at the time of settlement. If the member wants to transfer his SA accumulation to the Company he joins after

resigning from Tata Power. His Present company’s SA fund should be IT Recognized, on receiving application from the company where he joined

along with a copy of exemption certificate, the settlement is done and the amount is transferred.

QQQQ11111111....)))) IsIsIsIs thethethethe SuperannuationSuperannuationSuperannuationSuperannuation FundsFundsFundsFunds AccumulationAccumulationAccumulationAccumulation taxtaxtaxtax freefreefreefree ????

Ans. Only one third commutation amount is tax free. Pension received from LIC is taxable.

QQQQ12121212....)))) CanCanCanCan thethethethe SuperannuationSuperannuationSuperannuationSuperannuation FundFundFundFund accumulationaccumulationaccumulationaccumulation ofofofof aaaa membermembermembermember fromfromfromfrom hishishishis exexexex----employeremployeremployeremployer bebebebe transferred?transferred?transferred?transferred?

Ans. As per the rules of Superannuation Fund, if the company is IT Recognized then the transfer is allowed

QQQQ13131313....)))) WhatWhatWhatWhat isisisis thethethethe raterateraterate ofofofof interestinterestinterestinterest givengivengivengiven totototo members?members?members?members?

Ans. Since the fund is managed by LIC whatever LIC declares at the end of the FY and this depends on the size of the Fund.

Q14.) What are the various option under the superannuation scheme ?Q14.) What are the various option under the superannuation scheme ?Q14.) What are the various option under the superannuation scheme ?Q14.) What are the various option under the superannuation scheme ?

Ans. There are many options available under the superannuation scheme which can be opted at the time of settlement. The list options is given in the next

page..

Page - 27

List of Options:

a) Life Pension

b) Pension Guaranteed for 5 Years + Life

c) Pension Guaranteed for 10 Years + Life

d) Pension Guaranteed for 15 Years + Life

b) Pension Guaranteed for 20 Years + Life

f) Life Pension with Return of Corpus

g) Joint Life Pension.

h) Joint Life Pension with Return of Corpus

Most favourable option is LIFE PENSION WITH RETURN OF CORPUS

QQQQ15151515.... )))) CanCanCanCan anananan employeeemployeeemployeeemployee withdrawwithdrawwithdrawwithdraw duringduringduringduring thethethethe tenuretenuretenuretenure ofofofof hishishishis serviceserviceserviceservice ????


QQQQ15151515.... )))) CanCanCanCan anananan employeeemployeeemployeeemployee withdrawwithdrawwithdrawwithdraw duringduringduringduring thethethethe tenuretenuretenuretenure ofofofof hishishishis serviceserviceserviceservice ????

Ans. No, This is not allowed

QQQQ16161616.... )))) IsIsIsIs serviceserviceserviceservice taxtaxtaxtax applicableapplicableapplicableapplicable onononon SuperannuationSuperannuationSuperannuationSuperannuation ContributionContributionContributionContribution ????

Ans. Yes, How it is treated is explained in the nest page

.

Page - 28

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