The modified recommendations of the Sixth Central Pay Commission, notified by the government on Friday, also ensures a rise in the children education allowance besides an increase by 21 per cent on an average in the salaries of the government employees.
Retrospective effect

The revised salaries will reflect in next month’s pay though the report is to be implemented with retrospective effect from January 1, 2006.

The arrears would be given in cash – 40 per cent this financial year and 60 per cent in the next fiscal.
Reimbursement

According to the notification, children education allowance will be reimbursed up to maximum Rs.1,000 per child per month subject to a maximum of two children from the present Rs. 50 per child.
Hostel subsidy

Besides, hostel subsidy has been raised to the maximum limit of Rs. 3,000 per month per child from Rs. 300 currently.

Also, these reimbursements would be automatically raised by 25 per cent once dearness allowance on the revised pay bands become 50 per cent of the basic salary, the notification said.

As such, an employee getting Rs. 1,000 would get Rs. 1,250 per child per month and hostel subsidy would increase up to Rs. 3,750 when Dearness Allowance becomes 50 per cent of the basic salary.

New Delhi: For lakhs of central government employees looking forward to receiving 40% of the accumulated arrears on their increased salary next month, in time for some festive spending, here’s a dampener. The government has decided to levy tax on the entire amount of arrears — 60% of which will be paid next year — in the current fiscal itself.

For most employees, the decision would virtually wipe out almost the entire 40% arrears to be paid to them this year. Senior bureaucrats will suffer most as their tax would be topped with a surcharge of 10%, on income of Rs 10 lakh and above.

A senior finance ministry official said the surcharge to be paid by officers of the rank of joint secretary and above ranges between Rs 24,600 and Rs 52,500. The impact would be less on the lower grades.
The Centre had last month announced an average increase of 21% in salaries of its employees. The hikes, effective from January 1, 2006, would burden the exchequer by more than Rs 17,500 crore annually while the arrears alone account for more than Rs 29,000 crore.

Group 'D' employees of the Central government, including peons and drivers, can heave a sigh of relief as they are likely to get their 40 percent salary arrears in full without any income tax deduction on implementation of Sixth Pay Commission recommendations.

While the Group 'D' government employees will not have to pay tax on arrears, those belonging to higher levels can also claim marginal benefit by filing Form 10E of the Income Tax Returns, said a senior official of the Central Board of Direct Taxes (CBDT).

Among the Group 'D' employees, drivers receive highest salary because of over-time allowance, the tax official said, adding, "even they will fall short of the taxing limit by a whisker."

High ranking officials would not get as much benefit as their Group 'D' counterparts get as they already are in a larger tax bracket and may also be required to pay a "surcharge" on their salaries, Chartered Accountant Subhash Lakhotia said.

The government while approving the Pay Commission's recommendations said 40 percent of the arrears would be paid in the current year, while the remaining 60 percent would be disbursed in the next financial year. The arrears are with effect from January 2006.

On income tax liability on salary arrears, the official said, government employees would be required to pay taxes only on arrears which they would receive during the current year along with the benefits entitled under Section 89 and Rule 21 AA of the Income-Tax Act.

Lakhotia said senior officials "will only get a marginal benefit after filing Form 10E as the income-tax exemption limit for current year has increased."

Unhappy with modified Sixth Pay Commission award, taxmen have pointed out discrepancies in the revised pay scale and have sought Prime Minister Manmohan Singh's intervention in the matter.

Pointing out the discrepancies in the revised pay scale, income tax officials said when compared with their counterparts in some other departments, it amounted to virtually "lowering of status" of senior revenue officials.

"We are shocked at the decision of the government to ignore recommendations of the Pay Commission to upgrade the pay scale of members of CBDT to Rs 80,000 (fixed), even though the pay scales of Directors General of Police and Principal Chief Conservators of Forests have been upgraded without any recommendation," said a memorandum submitted by the Indian Revenue Service Association.

The Gazette Notification on sixth pay commission can be obtained at the following link
http://pib.nic.in/archieve/others/2008/aug/6th_payNotification.pdf

• Commission has recommended a minimum of 3330 rs pension except DA instead of earlier Basic plus DP.
• But further it has also qualify that basic pension should not be less than 50 % of the initial pay plus grade pay to be fixed corresponding to his old scale in which pensioner has retired basic start corresponding scale .
• As the govt has now enhanced the minimum basic pay +grade pay to 7000 from 6660 so new basic minimum pension should be 50 % of the basic pay i.e 50 % of 7000=3500
  
• so in my opinion (NOW CONFIRMED)as explained above no pensioner will get less than 3500 basic pay as on 01.01.2006
• The fixation as per this table will be subject to the provision that the revised pension, in no case, shall be lower than fifty percent of the sum of the minimum of the pay in the pay band and the grade pay thereon corresponding to the prerevised pay scale from which the pensioner had retired.
  

How to Fix new pension:Maximum of this will be your basic pension

• 2.26 of (old Basic pen )
• 3500 rs(as explained above)
• 50 % of minimum( Basic + grade pay )of new pay band corresponding to pay scale from which the pensioner retires
• maximum pension 50% of highest pay i.e 50 % of 90000=45000 basic
• Maximum Family pension 30% of 90000 i.e 27000.

so after calculation as above take maximum figure as your basic pension as on 01.01.2006 and then reduce the amount by commutation amount as earlier deducted from your old pension

EXAMPLE:1(PLEASE COMMENT IF WRONG WITH DETAIL)
	old (DETAIL)
scale(AT THE TIME OF RET)	4000-100-6000(S-7)
Basic at the time of retirement	5000
Pension fixed(50%)	2500
DP	1250
DA (as on 01.01.2006)	900
less commutaion(suppose)	600
pension befor allownaces	4050
MAXIMUM OF THREE WILL BE UR BASIC PENSION
AS ON 01.01.2006
CASE ONE	3500 (MINIMUM)
CASE TWO
(OLDBASICPEN*2.26	5650
CASE THREE
MINIMUM PAY BAND CORRESPONDING TO OLD SCALE
PAY BAND PB2 5200-20200
NOTIONAL BASIC	5200
GRADE PAY	2400
50 % OF BASIC & GRADE PAY	3800
NEW BASIC PENSION AS ON 01.01.2006=CASE TWO=5350
EXAMPLE:2(PLEASE COMMENT IF WRONG WITH DETAIL)
	old (DETAIL)
scale(AT THE TIME OF RET)	9000-275-9550(S-18)
Basic at the time of retirement	9000
Pension fixed(50%)	4500
DP	2250
DA (as on 01.01.2006)	1620
less commutaion(suppose)	1000
pension befor allownaces	7370
MAXIMUM OF THREE WILL BE UR BASIC PENSION
AS ON 01.01.2006
CASE ONE	3500 (MINIMUM)
CASE TWO
old basic pension*2.26	10170
CASE THREE
MINIMUM PAY BAND CORRESPONDING TO OLD SCALE
PAY BAND PB-3 15600-39100
NOTIONAL BASIC	15600
GRADE PAY	5400
50 % OF BASIC & GRADE PAY	10500
NEW BASIC PENSION AS ON 01.01.06 =CASE 3=10500

fill only two fileds first code relating to your old pay scale or new pay pand given below(1 to 36 in yellow cells) and basic pension(without dp ,if merged with it as on 01.01.2004) as on 01.01.2006 and get your arrers calculation .The old age allwance has not been considered(new rate given below) ,more over commutation has no impact on arrears ,hence not considered.
If you want to simple arrears calculation and your pension is not going to be fit at minimum of pay band that your arrears will jan .2006 to august 2008

Basic pension * 11.725135=arrears from 01.01.2006 to 31.08.2008
40% of arrears is to be given with September,2008 pension and balance in 2009-10
for exact calculation check calculator below

OLD SCALE		Revised New Scale	PAY BAND	GRADE Pay	code
S-1	2550-55-2660-60-3200	4440-7440	-1S	1300	1
S-2	2610-60-3150-65-3540	4440-7440	-1S	1400	2
S-2A	2610-60-2910-65-3300 -70-4000	4440-7440	-1S	1600	3
S-3	2650-65-3300-70-4000	4440-7440	-1S	1650	4
S-4	2750-70-3800-75-4400	5200-20200	PB-1	1800	5
S-5	3050-75-3950-80-4590	5200-20200	PB-1	1900	6
S-6	3200-85-4900	5200-20200	PB-1	2000	7
S-7	4000-100-6000	5200-20200	PB-1	2400	8
S-8	4500-125-7000	5200-20200	PB-1	2800	9
S-9	5000-150-8000	9300-34800	PB-2	4200	10
S-10	5500-175-9000	9300-34800	PB-2	4200	11
S-11	6500-200-6900	9300-34800	PB-2	4200	12
S-12	6500-200-10500	9300-34800	PB-2	4200	13
S-13	7450-225-11500	9300-34800	PB-2	4600	14
S-14	7500-250-12000	9300-34800	PB-2	4800	15
S-15	8000-275-13500	9300-34800	PB-2	5400	16
NEW	8000-275-13500	15600-39100	PB-3	5400	17
S-16	9000	15600-39100	PB-3	5400	18
S-17	9000-275-9550	15600-39100	PB-3	5400	19
S-18	10325-325-10975	15600-39100	PB-3	6600	20
S-19	10000-325-15200	15600-39100	PB-3	6600	21
S-20	10650-325-15850	15600-39100	PB-3	6600	22
S-21	12000-375-16500	15600-39100	PB-3	7600	23
S-22	12750-375-16500	15600-39100	PB-3	7600	24
S-23	12000-375-18000	15600-39100	PB-3	7600	25
S-24	14300-400-18300	37400-67000	PB-4	8700	26
S-25	15100-400-18300	37400-67000	PB-4	8700	27
S-26	16400-450-20000	37400-67000	PB-4	8900	28
S-27	16400-450-20900	37400-67000	PB-4	8900	29
S-28	14300-450-22400	37400-67000	PB-4	10000	30
S-29	18400-500-22400	37400-67000	PB-4	10000	31
S-30	22400-525-24500	37400-67000	PB-4	12000	32
S-31	22400-600-26000	75500-3%-80000	HAG	NIL	33
S-32	24050-650-26000	75500-3%-80000	HAG	NIL	34
S-33	26000(Fixed)	80000(Fixed)	APEX	0	35
S-34	30000(Fixed)	90000(Fixed)	CABSECT	0	36
OLD SCALE		Revised New Scale	PAY BAND	GRADE Pay	code
S-1	2550-55-2660-60-3200	4440-7440	-1S	1300	1
S-2	2610-60-3150-65-3540	4440-7440	-1S	1400	2
S-2A	2610-60-2910-65-3300 -70-4000	4440-7440	-1S	1600	3
S-3	2650-65-3300-70-4000	4440-7440	-1S	1650	4
S-4	2750-70-3800-75-4400	5200-20200	PB-1	1800	5
S-5	3050-75-3950-80-4590	5200-20200	PB-1	1900	6
S-6	3200-85-4900	5200-20200	PB-1	2000	7
S-7	4000-100-6000	5200-20200	PB-1	2400	8
S-8	4500-125-7000	5200-20200	PB-1	2800	9
S-9	5000-150-8000	9300-34800	PB-2	4200	10
S-10	5500-175-9000	9300-34800	PB-2	4200	11
S-11	6500-200-6900	9300-34800	PB-2	4200	12
S-12	6500-200-10500	9300-34800	PB-2	4200	13
S-13	7450-225-11500	9300-34800	PB-2	4600	14
S-14	7500-250-12000	9300-34800	PB-2	4800	15
S-15	8000-275-13500	9300-34800	PB-2	5400	16
NEW	8000-275-13500	15600-39100	PB-3	5400	17
S-16	9000	15600-39100	PB-3	5400	18
S-17	9000-275-9550	15600-39100	PB-3	5400	19
S-18	10325-325-10975	15600-39100	PB-3	6600	20
S-19	10000-325-15200	15600-39100	PB-3	6600	21
S-20	10650-325-15850	15600-39100	PB-3	6600	22
S-21	12000-375-16500	15600-39100	PB-3	7600	23
S-22	12750-375-16500	15600-39100	PB-3	7600	24
S-23	12000-375-18000	15600-39100	PB-3	7600	25
S-24	14300-400-18300	37400-67000	PB-4	8700	26
S-25	15100-400-18300	37400-67000	PB-4	8700	27
S-26	16400-450-20000	37400-67000	PB-4	8900	28
S-27	16400-450-20900	37400-67000	PB-4	8900	29
S-28	14300-450-22400	37400-67000	PB-4	10000	30
S-29	18400-500-22400	37400-67000	PB-4	10000	31
S-30	22400-525-24500	37400-67000	PB-4	12000	32
S-31	22400-600-26000	75500-3%-80000	HAG	NIL	33
S-32	24050-650-26000	75500-3%-80000	HAG	NIL	34
S-33	26000(Fixed)	80000(Fixed)	APEX	0	35
S-34	30000(Fixed)	90000(Fixed)	CABSECT	0	36