Sunday 1 January 2017

Increase In Take Home Pension of Lt Col After Implementation Of 7CPC


In the case of Lt Col veterans, with service ranging from 28 to 30 years, it was seen that in many cases the increase in take home pension as credited in December 2016 (after deduction of TDS) was in the range of 5000 to 6000 Rupees. I had tweeted on one verified case here.


This could be due to the manner in which TDS has been processed by PDAs, with a larger monthly outgo resulting at the end of the financial year in months from December 2016 to Feb 2017 (March 2017 pension being included in Asst Yr 2018-19).

Using the tax slabs as applicable to senior citizens between 60 and 80 years, a rough table is shown as follows to indicate the "take home" pensions in November 2016 (before 7CPC implementation) and December 2016 (after implementation of 7CPC) and the net difference between them.

The actual annual figures are likely to be slightly different due to variations in Dearness Relief over the entire year and hence in TDS. In this case Commutation Value has been taken as nil which too will impact TDS and "take home" pensions.


This is also the right time to refresh our memories that the 7CPC pension of 91133/- [without deduction of tax and commutation amount] presently paid to a Lt Col with a service of 33+ years under the 2.57xOROP fixation may be equal to the pension of a Lt Col with about 25 years of service if the matrix method is applied as mentioned in the table in (please click on the link to view) this blog post

Errors or queries, if any, may please be taken up in the "Comments" section.