7th Pay Commission Latest News: The real increase in minimum pay of Central Government Employees due to the implementation of the 7th Central Pay Commission (CPC) recommendations was 14.3% compared to the minimum pay under VIth CPC. The increase in pay in VIth CPC was 54% compared to Vth CPC.
Also, the increase in minimum pay under Vth CPC compared to the previous CPC was 31%. The Union Miniser of State in the Ministry of Finance, Pankaj Chaudhary, shared this information in a written reply to a query in the Lok Sabha on Monday (March 20).
The Minister also shared details of various tax-relief measures announced for employees, and pensioners since 2014. These are:
1. Through Finance (No. 2) Act 2014, the basic tax exemption limit applicable in the case of individuals, was enhanced from Rs. 2 lakh to Rs 2.5 lakh. Further, this Act also increased the limit for claiming deduction under section 80C of the Income Tax Act, 1961(the Act) from Rs 1 lakh to Rs 1.5 lakh
2. Finance Act, 2017 reduced the rate of income Tax for individuals whose total income is between Rs 2.5 lakh to Rs 5 lakh from 10% to 5%.
3. Standard deduction of Rs. 40,000 was introduced for salaried taxpayers as well as pensioners vide Finance Act, 2018 which was further increased to Rs. 50,000 vide Finance Act, 2019.
Also Read: Should you rent or buy a house when home loan rates are rising?
4. Finance Act, 2019 also provided for full tax rebate for individuals having taxable annual income up to Rs. 5 lakh under section 87A of the Act.
5. In order to provide relief to senior citizens including those senior citizens receiving pension, Finance Act, 2018 provided various incentives which included,-
- increase in the limit of deduction on account of payment of health insurance premium and/or medical expenditure from Rs 30,000 to Rs 50,000 under section 80D of the Act;
- increase in the limit of deduction for medical expenditure in respect of certain critical illness from Rs 60,000 and Rs 80,000, in the case of senior citizens and very senior citizens respectively, to Rs 1,00,000 in the case of all senior citizens (of the age of 60 years or more) under section 80DDB of the Act;
- a deduction of Rs 50,000 was provided to senior citizens on interest income from deposits with banks, co-operative societies and post offices under section 80TTB of the Act and the threshold level for tax deducted at source on interest income for senior citizens was increased from Rs 10,000/- to Rs 50,000 under section 194A of the Act.
Also Read: Wait for higher pension under EPS to be longer
6. In order to ease the compliance burden on senior citizen pensioners who are of 75 years of age or above having pension and interest income, the Finance Act, 2021 provided that such persons shall be exempted from the requirement of filing of income tax if the full amount of tax payable has been deducted by the paying bank.