Friday, January 20, 2012

NPS contribuitons in Samiit- Not Eligible for Tax Deductions?

Samiti has notified NPS for new employees and accordingly made deductions from March 2010 from their salaries and has been depositing in an NPS Fund Account in the absence of a dedicated fund manager and record keeping agency.  This causes a huge financial loss to the new employees (to know more please read my previous post "Delay in implementation of NPS costs each employee Nine to Twenty Five Lakh rupees") 
Besides the financial loss, there is a tax angle which is blatantly ignored in Samiti. As per section 80CCD of Income Tax Act the contributions of both the employees and employers are exempted (with a cap of 10 per cent in case of employer) if such amounts are paid  "in his account under a pension scheme notified or as may be notified by the Central Government".  As the NPS is notified under relevant finance bills, the contributions are allowed as deductions under section 80CCD. What about the NPS Fund Account of the Samiti? Which financial bill notified it for exemption? Isn't allowing the contributions as deductions a clear violation of the law of the land? The onus of TDS lies with the Principals and in the absence of individual income tax return filing, responsibility of the Principals has become more crucial.

Whatever may be the outcome, the losers are employees. The policy to implement NPS in Samiti  is a classic case study  of improperly thought out and hastily effected policy of governance.

Monday, January 2, 2012

Revised RFQ makes PPP less dangerous!!

Please refer to the post where this Blog described the development of 3 Navodayas under PPP mode as an initial step for wholesale privatization and strongly objected to the clause "Hierarchy of Use of the Facilities" as it is nothing but an attempt for Real Estate Business in the disguise of PPP. Thankfully that clause is removed through an addendum. This blogger feels vindicated.