Project report on Types of allowances and their permissible limits

SUBMITTED BY. Chandani verma Trishla tyagi Asmita parmar Arushi singh Pooja jain
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Monica janmeda

ABSTRACT

The study gives a detailed view about the different types of allowances offered to emplotees in various organizations. The study is based on both primary and secondary data. This study tells about various benifits given to employees since they form the most important part of the organization. Without providing proper benefits to the employees it is not possible for any organization to run. Therefore allowances/benefits given to them should be good enough to motivate them to keep performing.

INTRODUCTION An allowance is an amount of money given or allotted usually at regular intervals for a specific purpose. Allowance is generally defined as a fixed quantity of money or other substance given regularly in addition to salary for the purpose of meeting some particular requirements connected with the service rendered by the employee or as compensation for unusual conditions of that service. There are generally three types of allowances for the purpose of income taxsome are taxable, while some are fully or partially exempted. As a general rule, all allowances are to be included in the total income unless specifically exempted. Your salary is paid directly to your bank account on the last day of the month excepting for the month of March when it is paid on the first working day of April. The Financial Year for tax purposes is from April 1 of a given year to 31st March of the following year. The yearly increment is given from the first day of the month in which you were appointed in a scale. If the employee is on leave, other than casual leave, on the first day of the month in which the increment is due, the increment is given from the day when the employee joins the duty There are several components of salary: Base/ basic (fixed amount) most of this is taxable Benefits (never paid in cash) indirect form of compensation Bonus (paid with respect to performance in organization) When given to individual is called merit and when given to a group is called incentives.

LITERATURE REVIEW The purpose of the study was to know the different types of allowances that private and government sector offers and their permissible limits. A Well-designed allowance systems help communicate the definition of outstanding performance and leading to an individuals success to progress toward that goal. In doing so, they help align individuals goals with those of the organization, and help individuals learn how they can best contribute to performance. A well designed plan effectively implemented can serve as a powerful force for productive organizational change. Employers provide allowances to give employees flexibility in creating a benefits package that best meets their needs.

The ways in which well-designed allowance systems create value in organizations are grouped into broad categories. Specifically: 1. Improve the productivity of employees as well as motivation level. 2. Promote productive turnover in personnel, 3. Mobilize valuable specific knowledge by allowing effective decentralization.

The type of compensation varies with different position in the organization, people at superior level get more benefits in terms of allowances as compared to lower level employees, but irrespective of designation there are some common allowances that are provided to every employee in the organization to maintain the level of motivation and satisfaction among the employees.
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Allowance payments

Definition:

Most modern awards prescribe monetary allowances to compensate for a number of different conditions and qualifications. These allowances are usually amounts paid to an employee in specified circumstances, for doing particular work or carrying certain responsibilities. For those employees not covered by awards and agreements, their contracts of employment or company practice determine their level of entitlement. Allowances can generally be separated in two broad categories; namely, those which are intended to reimburse actual expenses incurred (e.g. tools, travelling, meals); and those which relate in some way to the nature or location of the work itself (e.g. disabilities, special skills, locality).
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The reimbursement of expenses group of allowances is adjusted where appropriate in conformity with increases in actual costs, whereas the work-related group of allowances is generally adjusted proportionately with wage increases.

TYPES OF ALLOWANCES City Compensatory Allowance (CCA): A fixed sum of Rs 300/- to take care of your increased expense in a city like Mumbai - not much considering the prices in this city but better than not getting it. If you do not stay in the campus accommodation, you will also receive House Rent Allowance (HRA) which is 30% of basic + DP. The allowance is payable even when you stay in an accommodation owned by you. However, the amount is tax-free only when you actually stay in a rented accommodation and not when you live in your own house. Those staying outside the campus also receive Rs 800/- per month as transport allowance. Deductions: When you receive your salary slip, you will find some deductions as well. The primary deductions are:

Income Tax: Income tax rates are as per finance bill passed by the Parliament every year. It is possible to minimize your tax liability by some tax shelters. Almost every Department has a local expert on such matters for advising you on this. Filing an income tax return every year is compulsory. Unless the last date is extended, returns have to be filed by 31st July following the financial year for which the return is being filed. (Though you are required to submit the return yourself/post, if you enquire with the Accounts section, you will probably find some one willing to take the papers to the ITO and bring back the receipt, for a small cost.) Profession Tax: Currently Rs 2500/- per year. Contribution to CPF/GPF License Fee and utility charges for your quarter in the campus.

Special Compensatory Allowance for hilly areas or high altitude allowance or climate allowance. Rs.800 common for various areas of North East, Hilly areas of UP, HP. & J&K and Rs. 7000 per month for Siachen area of J&K and Rs.300 common for all places at a height of 1000 mts or more other than the above places. Border area allowance or remote area allowance or a difficult area allowance or disturbed area allowance. Various amounts ranging from Rs.200 per month to Rs.1300 per month are exempt for various areas specified in Rule 2BB.

Any allowance granted to an employee working in any transport system to meet his personal expenditure during duty performed in the course of running of such transport from one place to another place. 70% of such allowance upto a maximum of Rs.6000 per month.
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Allowance granted to meet hostel expenditure on employees child. Rs.300 per month per child upto a maximum two children. Compensatory field area allowance available in various areas of Arunachal Pradesh, Manipur Sikkim, Nagaland, H.P., U.P. & J&K. Rs.2600 per month.

Call out allowance (work-related) A call-out allowance is payable to employees who are rostered for call-out standby. Refer to the relevant award/agreement for the amount of the allowance. If no industrial instrument is in place, anecdotally a common amount is between $50-$70 per week. In addition, a kilometre allowance for use of private motor vehicle is also often paid for employees who are rostered on call-out. See the award/agreement rate; otherwise, again, anecdotally a rate of $0.50-$0.60 per km is common. The pay office should keep a copy of the call-out roster to enable payment of the call-out allowance to be made.

Camping allowance (expense-related)

Where employees are required to reside away from home at places where accommodation is not available, camping facilities must usually be provided by the employer, and provision is usually made in such cases for the payment of a camping allowance of a specified sum. Car allowance (expense-related)

Employees whose duties may require them to use a motor vehicle are frequently prescribed an allowance to compensate those who make their own vehicles available. Most commonly these allowances are expressed on a flat rate basis, but the actual amount prescribed differs considerably under different awards, agreements and contracts. Issues which may arise where a car allowance is involved include the unfair dismissal salary cap and whether a car allowance is included in the definition of 'ordinary pay'.

Climatic and zone allowance (work-related)

Awards regulating the employment of persons who may be required to work in remote localities frequently prescribe what are referred to as 'climatic allowances'. Whilst in some cases the climatic factor might be considered to warrant the payment of a special allowance, it is more common to find that disabilities such as the absence of various amenities (eg schooling, medical facilities) are the factors which are responsible for prescription of additional payments.

First aid allowance (work-related)

Awards generally prescribe that where an employee is required by the employer to act as a first aid attendant an additional allowance is payable to such employee. However, the allowance is not generally payable to an employee who possesses a first-aid certificate but has not been appointed to perform first-aid by the employer. Follow The Job allowance (work-related)

In occupations in which employees have normally no fixed place of employment, or where they are frequently required to change their usual place of working (eg in the building and construction industry), payment of fares and travelling time is usually prescribed apart from any provision for payment for distant work in the normal sense. Generally, such an allowance is prescribed as a formula, usually by multiplying the appropriate weekly rate by 52 and divided by 48.8. Industry allowance (work-related)

This allowance usually applies in the building and construction industry (or other industries the nature of which involves work outside or non-factory work) because work in that industry has special features. It is usually regarded as forming part of an employees ordinary pay for the purposes of that industrial instrument, unless provided for otherwise.

Meal allowance (expense-related)

Most awards provide that employees that are required to work overtime in excess of specified periods, in some cases without being notified the previous day or earlier, shall be supplied with a meal by the employer or paid a meal allowance. Provision is also made in some cases for the payment of additional allowances if the overtime extends into any subsequent meal time.

Shift allowance (work-related)

Where an industrial instrument provides for the working of shifts, compensation for doing so will be prescribed in the form of a shift allowance. These vary among industrial instruments and the type of shifts worked. A common provision in awards prescribes 15% (or alternatively a flat rate) for permanent or rotating afternoon shift, and 30% for permanent night shift. Employees on continuous shift work may receive only one rate for working all shifts or may receive a rate for working afternoon and night shift, eg 15%, but no loading for the day shift.

Normally, a shift allowance is not payable for any shift not worked, eg sick leave, public holidays, bereavement leave, workers compensation, etc unless otherwise specified by the relevant industrial instrument. This is because industrial tribunals regard a shift allowance as a penalty or disability payment which does not form part of ordinary pay, despite being payable for work performed during an employee's ordinary hours. Therefore, in the absence of a specific provision in the relevant industrial instrument, overtime is calculated on the employee's ordinary rate, exclusive of the shift allowance.

Under most awards shift allowances only apply during ordinary hours - they do not apply during overtime hours.

Site allowance (work-related)

In the building industry, industrial tribunals may award a specific allowance to apply on a particular building site. If such an allowance is awarded, it will usually apply in lieu of any disability allowances contained in the award.

Special rates (work-related)

To provide for cases where work is performed under unusually disagreeable or dangerous conditions, awards usually contain special or extra rates clauses prescribing additional allowances to meet such cases. These special rates are most commonly payable where work is performed in places unusually hot, cold, wet, dirty, unpleasant or unsafe, in confined spaces, in high places or underground.

When an employee performs work which may attract two or more special rates, the industrial instrument will normally provide that the highest rate applies to the work to the exclusion of the other rates. In addition, these special rates are not ordinarily taken into account when applying penalty rates for work such as overtime or public holiday work. The result is the special rates are added to the total after the penalty rate has been calculated. Non practicing allowance this allowance is given to those professionals( doctors, CA etc) who are in government service and are banned to do private practice. It is to compensate them for this ban. It is fully taxable.
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Tool allowance (work-related)

It is customary in most trades for each tradesperson (and, in some cases, apprentices) to possess a kit of tools necessary to carry out most classes of work, but excepting those tools which are so unwieldy or heavy that they are difficult to carry about. The tool allowance is generally prescribed by an award to compensate for wear and tear on tools.

It is also common that this type of allowance is payable 'for all purposes of the award'. This means that the allowance is usually taken into account when applying any calculation contained in the award such as penalty rates, overtime, during periods of paid leave such as sick leave, public holidays, annual leave, etc.

Dearness allowancesDearness allowance is the most popular allowance being given to employees these days. It is determined on the basis of rising prices of com-modities in general. The amount is taxable. However, it is not included in salary for pensionary benefits. If the terms of employment so provide, it may be included in salary for pension or provident fund contribution too. In that case for all practical pur-poses generally basic salary will include dearness allowance. Sometimes the dearness allowance is converted into dearness pay which will then certainly be included for pen-sionary benefits.

House rent allowances HRA is given by employer to the employees to met the expenses in connection with rent of the accommodation which the employees might have to take for his residual purpose. The HRA so paid I s taxable under head income from salaries to the extent it is not exempt u/s 10(13A) HRA RECEIVED (XX)
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Less: EXEMPT TAXABLE AMOUNT

(XX) (XX)

House Rent Allowance:- Provided that expenditure on rent is actually incurred, exemption available shall be the least of the following : (i) HRA received. (ii) Rent paid less 10% of salary. (iii) 40% of Salary (50% in case of Mumbai, Chennai, Kolkata, Delhi) Salary here means Basic + Dearness Allowance, if dearness allowance is provided by the terms of employment. Leave Travel Allowance: The amount actually incurred on performance of travel on leave to any place in India by the shortest route to that place is exempt.

Conveyance allowance : This is the amount given by the employer for meeting conveyance expenses of the employee. This is not taxed on the general presumption that the amount must have been spent by the employee on conveyance used for official purposes. In case there remains some unspent amount, it is taxed. It is important to note that where the conveyance is owned by the employee himself, the allowance is neither taxed nor the assessee allowed any deduction on account of the wear and tear of the conveyance used in discharge of his official duties.

TYPES OF ALLOWANCES AND AMOUNT EXEMPT

(i) Special Compensatory Allowance for hilly areas or high altitude allowance or climate allowance. Rs.800 common for various areas of North East, Hilly areas of UP, HP. & J&K and Rs. 7000 per month for Siachen area of J&K and Rs.300 common for all places at a height of 1000 mts or more other than the above places.

(ii) Border area allowance or remote area allowance or a difficult area allowance or disturbed area allowance.

Various amounts ranging from Rs.200 per month to Rs.1300 per month are exempt for various areas specified in Rule 2BB.

Rs.200 per month. iii) Tribal area/Schedule area/Agency area allowance available in MP, Assam, UP., Karnataka, West Bengal,

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Bihar, Orissa, Tamilnadu, Tripur 70% of such allowance upto a maximum of Rs.6000 per month. (iv) Any allowance granted to an employee working in any transport system to meet his personal expenditure during duty performed in the course of running of such transport from one place to another place Rs.100 per month per child upto a maximum 2 children. (v) Children education allowance. (vi) Allowance granted to meet hostel expenditure on employees child. Rs.300 per month per child upto a maximum two children.

(vii) Compensatory field area allowance available in various areas of Arunachal Pradesh, Manipur Sikkim, Nagaland, H.P., U.P. & J&K. (viii) Compensatory modified field area allowance available in specified areas of Punjab, Rajsthan, Haryana, U.P., J&K, HP., West Bengal & North East. (ix) Counter insurgency allowance to members of Armed Forces.

Rs.2600 per month.

Rs.1000 per month

Rs.3900 Per month

(x) Transport Allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of residence & duty. (xi) Transport allowance granted to physically disabled employee for the purpose of commuting between place of duty and residence

Rs.800 per month.

Rs.1600 per month

(xii) Special allowance in the nature of high altitude allowance granted to members of the armed forces. (xiii) Any special allowance granted to the members of the armed forces in the nature of special compensatory highly active field area allowance.

Rs. 1060 p.m. (for altitude of 9000-15000 ft.) Rs.1600 p.m. (for altitude above 15000 ft.) Rs. 4,200/- p.m.

Source: INCOME TAX DEPARTMENT

RESEARCH METHODS AND PROCEDURES

1 Objective of the study

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The objective of the study is to know different types of allowances and their permissible limits. 2 Research Design The design used for this research is exploratory and aims to study the allowances. Primary data Primary data are in the form of raw material to which statistical methods are applied for the purpose of analysis and interpretations. The primary data was collected from different companies with the help of personal sources. Sample Size: 5 Researcher Area: Delhi/NCR Secondary data Secondary data was collected with the help of websites and online journals.

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ALLOWANCES AND THEIR PERMISSIBLE LIMITS THAT PREVAIL IN PANACEA BIOTEC LTD.

ADVANCE AGAINST SALARY-maximum of his /her 3 months Basic in times of urgent need / emergency. All such advances will be recovered from the monthly salary of the employees maximum in 24 equal installments. COMPANYS CAR, CAR RUNNING AND MAINTENANCE EXPENSEELIGIBLE MAXIMUM PRICE OF THE CAR CAR RUNNING AND EMPLOYEE TO BE GIVEN MAINTENANCE GRADE EXPENSE (PER MONTH) E-1 Rs.1400000 Rs.16000 E-2 Rs.1000000 Rs.14000 E-3 Rs.750000 Rs.13500 E-4 Rs.450000 Rs.10000 E-5 On the basis of individual NIL performance with business need and case to case basis E-6 On the basis of individual NIL performance with business need and case to case basis DOMESTIC TRAVEL Tour within 100 km of area will not considered as outstation travel. GRADE E-1&E-2: - actual for rented taxi or Rs.5.50 per km if own car is used. GRADE E-3&E-4: - actual for rented or Rs.5.00 per km if own car is used. GRADE E-5&E-6: - actual for rented taxi or Rs.4.25 per km if own car is used. GRADE E-7&E-8: - Actual for auto /public transport or Rs. 2.00 if own two-wheeler is used. EX-GRATIA - The Ex-gratia payment shall be disbursed at the time of Deepawali. Employees who have joined the service Rs. 2100/in previous financial year i.e. till 31st March of current year. Employee have joined in current Rs. 1100/financial year i.e. during 1st April to (Executive & Staff) 30th September Rs. 500/- (worker) Black Berry & Mobile Connectivity and Data Card Reimbursement of Mobile Limit for International Sales & Marketing Team: The standard limit is Rs 8000/- per month irrespective of the grade & level. This limit would be Rs. 96,000/per annum on a cumulative basis for a year for an employee. II. Reimbursement of Black Berry & Reliance or other connections for SBU/Functional Heads: The combined limit for Black Berry & Reliance or other connectivity will be Rs 5000/per month for Employees in grade E3 and above. This limit would be Rs 60,000/- per annum on a cumulative basis for a year for an employee. I.

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III.

Reimbursement Limit of Data Card: a. Data Card will be issued to the users as per the importance of Business needs and not on hierarchy level. It will be issued to those users only who are very much mobile and require to travel more than 10 days a month and really needs to do a lot of work while traveling and at home also. b. Reimbursement of the Data Card limit will be Rs 750 /- per month per employee. RELOCATION: - An employee on transfer will be eligible to get one months basic salary as disturbance allowance. On transfer, an employee will be allowed to travel by train for shifting his family (self, spouse and kids) as applicable to his grade.

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ALLOWANCES AND THEIR PERMISSIBLE LIMITS THAT PREVAIL IN CENTRAL EXCISE SOURCE: SERVICE TAX DEPARTMENT Compensatory allowances: According to the 6th pay Commission government has providing Special Compensatory allowances to the employees (Hill Area/Remote Locality), Tribal Area Allowance and Bad Climate Allowance :-

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 Traveling Allowance: The Commission recommended to allow travel by any means of public transport for road travel between places connected by rail, with a condition that total fare does not exceed the train fare by the entitled class.

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 Daily Allowance

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The rates of all the components of Daily Allowance shall automatically increase by 25% whenever the Dearness Allowance payable on the revised pay bands goes up by 50%. For journey on foot, an allowance of Rs.5 per kilometer traveled on foot shall be payable additionally. This rate will also be increased by 25% whenever DA payable on revised pay scales goes up by 50%.

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 House Rent Allowance: The Commission recommended merger of C Class Cities (having population of 50,000 to 5 lakh) with `Unclassified Towns' (having population of less than 50,000). The existing population criterion for classifying towns and cities for purposes of HRA is being retained but population in the urban agglomeration should be taken into account for classifying a city for purposes of HRA. HRA in A-1 cities be paid at the rate of 30% of the total of revised pay in the running pay band and grade pay thereon. _ Erstwhile A, B-1 and B-2 categories are being merged. _ The following rates of House Rent Allowance

6. Education Allowance: Children education allowance will be admissible to school going children only i.e. from class nursery to twelfth. Now onwards, education allowance will not be stopped even if child fails in the examination Both education allowance and hostel subsidy can not be availed concurrently Reimbursement of education will include expenditure incurred on one set of books and notebooks, one pair of shoes, two sets of uniform, and school fees etc.

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7. Travelling allowances on Transfer

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BHARAT HEAVY ELECTRICALS LIMITED

For Executives in E1 & above grades for the Financial Year 2013-14 S. No. 1. 2. Name of Perks and Allowances Washing Allowances Reimbursement of Conveyance Expenditure For Car For Scooter/ Motorcycle For Moped 3. 4. 5. Vehicle Maintenance Reimbursement Transport assistance Reimbursement of Fees(Max. 2 children) Up to Graduation For Professional Courses Hostel Charges (Max. For 2 children) Reimbursement of Professional Development Expenditure (including Reimbursement towards newspaper, technical journals , magazines, books etc.) Reimbursement of Internet Charges & Membership of Professional Bodies both National & Internaional Reimbursement of Entertainment Expenditure Leave Travel Concession/ Leave Travel Assistance Housing Loan Recovery Reimbursement Vehicle Loan Recovery Reimbursement Reimbursement of Perquisite Tax on Housing Uniform Maintenance Reimbursement Reimbursement of Club membership Reimbursement of House Up-Keep Expenditure Reimbursement of Electricity Charges Reimbursement of hiring domestic helpers Reimbursement of Hiring Gardener Reimbursement of hiring driver Fitness allowance Other allowance % of basic pay per month Upto 3% Upto 10% Upto 5% Upto 3% Upto 5% Upto 10% Upto 5% Upto 10% Upto 10% Upto 10%

6. 7.

8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

Upto 5% Upto 5% Upto 15% Upto 10% Upto 5% Upto 3% Upto 3% Upto 5% Upto 5% Upto 10% Upto 5% Upto 5% Upto 5% Upto 3% Upto 15%

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STATE BANK OF INDIA OFFICERS ASSOCIATION (Hyderabad Circle) Phone Nos. 040-2475 6440, 6270, 6272 Fax No:2475 6874 SERVICE CONDITIONS AT A GLANCE (UPDATED AS ON 31ST DECEMBER 2012)
(For more details you are advised to refer the Circulars issued by the Bank in this regard)

1. SALARY & ALLOWANCES-REVISED W.E.F 01.11.2007 I. SCALES OF PAY

JMGS I - ` 14500600/7-700/2-800/7 - ` 25700 + 800/3 - ` 28100 + 2 S.I of ` 800/-each + 2 Addl. S.I of ` 900/- each MMGS II - ` 19400700/1-800/10 - ` 28100 + 800/2-900/2 - ` 31500 + 1 S.I of ` 900/- + 2 Addl. S.I of ` 900/- each MMGS III - ` 25700800/5-900/2 - ` 31500 + 2 S.I of ` 900/-each + 2 Addl. S.I of ` 900/- each S.I - Stagnation Increment SMGS IV - ` 30600900/4-1000/2 - ` 36200 SMGS V - ` 362001000/2-1100/2 - ` 40400 VII. FPP: who are in service on or before 01.11.1993 II. PQP: CAIIB PART I ` 410 p.m - one year after reaching top of scale + HRA @ applicable rates, when leased CAIIB PART II ` 1030 p.m - Two years after reaching top of scale Increment + D.A (Nov 07) house facility is not availed. III. D.A: For every 4 points rise / fall beyond 2836 points of CPI 800 + 58 = ` 858 Superannuation benefits on increment @ 0.15% per slab on B.P+PQP+Adj. Pay+S.I-{D.A from Nov. 2012 76.50%} 900 + 65 = ` 965 component. Will be protected on promotion from one cadre to IV. HRA: Major A-8. 5%; Area I-7.5%;Others-6.5% of B.P+PQP+S.I 1000 + 72 = `1072 another cadre / scale & revised one 1100 + 79 = ` 1179 V. CCA: Higher CCA-4% of B.P-Max. `540; Lower CCA-@ 3%-B.P Max. `375 year after reaching maximum in VI. HRR: For rent @ 1.20% of first stage of pay or standard rent which ever is lower; VIII. Mid Academic Transfer Allowance: ` 700 p.m (w.e.f 01.05.10) next scale. For furniture @ 0.25% of first stage of pay IX. SPECIAL BALANCING ALLOWANCE (SBA) w.e.f 01.11.2007: All officers who were in permanent service of Bank as on 31.10.2007 are eligible for Special Balancing Allow ance @ 6.5% of the revised Basic Pay (9th Bipartite) w.e.f 01.11.2007 (including e-SBS officers w.e.f 13.08.2008). This allowance will be paid on moving Basic Pay on or after 01.11.2007 till the period of 9th Bipartite i.e., 31.10.2012 and will be frozen thereafter. This will not rank for DA, HRA, CCA etc., or superannuation benefits (Not included for leave encashment also). X. OFFICIATING ALLOWANCE: @ 6% of B.P of officer, who officiates in XI. SPECIAL COMPENSATORY ALLOWANCE (SCA): w.e.f 01.10.2001 higher scale and the allowance will rank as pay for provident fund only. Who are in service (Minimum period 7 days continuously or an aggregate in a calender month) When Basic Pay (Revised) Prior to 01.11.93 From 02.11.93 to 23.07.2003 an officer is called upon to officiate in a higher grade position on regular basis, Up to ` 23300 ` 575 ` 225 he would get the entitlements i.e., Leased Accommodation, cleansing `24100-28100 ` 650 ` 300 material, casual labour, news paper and magazines, telephone bill, `28900-29700 ` 700 ` 300 conveyance reimbursement & personal entertainment (but not `30600 ` 850 ` 300 expenses incurred on tea, coffee etc.,), as per the incumbancy of the post.
`31500 & above ` 1000 ` 450

2. Promotion policy: 2007-08

Eligibility as on April 1st every year; Residual service: Minimum 2 years as on date of eligibility; No. of chances: 6; Option to opt out.

Service eligibility for MMGS II : 4 years MMGS III : 3 years, SMGS IV : 3 years & SMGS V : 4 years. For MMGS II & III: Merit & Seniority cum Merit channels (MMGS II :10; III :9 years)

Mandatory assignments: For MMGS III : 2 years service in Rural / S.U branches; For SMGS IV : 3 years service in Rural / S.U & 2 years satisfactory independent line assignment.

3. LFC & HTC facility in a block of 4 years (First block of 2 years LFC & Next block HTC or vice versa). LFC encashment: 75% of the train fare for entitled class;
JMGS I, MMGS II & III (1st class or AC 2 tier) 4500K.Ms; SMGS IV & V (AC 1st class) 5500 K.Ms (Distance one way); Facility of encashment of P.L is available while encashing LFC also and to proceed on leave for a minimum period of one day. ELIGIBILITY CLASS FOR LFC (01.05.2010): JMGS I-1st class or AC 2 tier and is entitled to travel by Air in the economy class (lowest fare), in which case reimbursement will be Air economy class (actual fare) or AC 1st class whichever is lower, MMGS II & III AC 1st class or Air (Economy)-if distance > 1000 K.Ms. For < 1000 K.Mssame as JMGS IScheme & SMGS IV & V Children AC 1st class orcategories Air (Economy). of all of staff (Day Standard 4th & 5th - ` 600, 6th to 8th - ` 1000, 9th & 10th - ` 4. Educational Scholarship Scholars / Boarders) Tuition / Admission (per annum) (w.e.f 2008-09) 1200, fees will be reibursed for those who are 11th&12th - ` 1500, Graduate - ` 1600, P.G - ` 2100 & drawing B.P up to Rs.25,700/Professional Courses - ` 2700. Four wheeler (1000 CC or more) - ` 9.00 per K.M Four 5. Reimbursement of Traveling Using own vehicles for official duties, LFC & on transfer Wheeler (Less than 1000 CC) - ` 7.00 per K.M Motor Expenses (w.e.f 30.09.2011) Cycle/Scooter - ` 4.50, Mopeds - ` 3.00 per K.M Hilly terrain @ ` 5.80 [30 paise] per K.M per tonne. 6. Transportation Charges on transfer Where officer has family: 3000 K.Gs up to B.P `19400 & Transportation of car by Lorry-Actual lorry Other than hilly terrain ` 3.90 [20 paise] per K.M per ton Full Wagon (12 ton) for B.P > `19400 upto charges up to 40, 35, 30% distance up to 600, 1000 & beyond 1000 K.M respectively, of 600 K.M & @ ` 1.95 [10 paise] per K.M per ton beyond No family: entitlement for shifting house holds 600 1500 K.Gs upto B.P `19400 20% higher charges on retirement. K.Ms (incremental). For shorter distance below 300 K.Ms, 2500 K.Gs for B.P > `19400 cost to be reimbursed for minimum 300 K.Ms. Rates are (Revised rates w.e.f 01.07.12) every of year @ prescribed rate mentioned above Up to a ceiling half the Halting allowance or ` 400 per 7. Out of pocket expenses 15 KMs away from office & 5 KMs away from revised brackets [ ] up 01.07.2015. day whichever is to lower residence or vice versa & remains away for in

For journey completed on the same day (w.e.f 01.04.2011) 8.Staff advances:

at least 4 hours ` 40, 000 (Margin-10%) ` 20.00 lacs (Margin-10%)

For 2nd house also within ceiling

Computer Loan 5% (Simple) Officers with 2 years service incl. probation

Festival advance-One Month gross salary (incl. notional HRA). Housing loan 6 % (Simple)-Officers with 5 years uninterrupted service

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All Officers incl. on probation

Car & Two wheeler Loan 7% (Simple) - All confirmed officers

` 7.00 lacs for both (Margin-10%) ` 7.00 lacs (subject to PF balance) ` 2000 for all scales

Personal Loan - D.L-8% (Simple)-Officers with a minimum of 3 years service Overdraft 8% (compounding) All officers-Once in 2 years from the date of 9. Provision of Fixture Items purchase (at circle level) (w.e.f 13.08.2011)

ety, Hyderabad

Long Term Loan (incl. Short Term): ` 5.00 lacs; Rate of Interest: 9.25% (quarterly rests); Thrift Deposit: ` 1,000 p.m.; MBF: ` 300 & Monthly installment: ` 7,000/-

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DESC. OF PERK, ELIGIBILITY, AREA, PERIODICITY & ETC., 1. Conveyance Reimbursement- All
officers including POs & TOs on probation

AMOUNT IN ` (Other than figures in brackets) Car 2 wheelers Car 2 wheelers Car 2 wheelers JMGS I MMGS MMGS SMGS IV II III (60) (80) (95) (105) 2580 1430 2080 2580 (50) 1430 (55) (75) (85) (95) 2280 1270 1990 2280 (45) 1270 (50) (70) (75) (85) 1990 1120 1680 1990 (40) 1120 1370 950 20 650 27200 18200 9200 4500 3000 3500 33000 22000 11000 5000 3500 4000 1050 35 950 38700 25700 12700 5500 4000 5000 49500 39500 29000 23000 16000 13000 51500 41500 31000 25000 18000 15000 (1200) 1440+260+210 = 1910 20000 800 800 25000 1000 1000 * SMGS V

Scale

Area I Population =>12 lacs i. Who own vehicles (Monthly) AreaII Population a) Declaration basis-(Litres in brackets) =>1 lac carry over till the end of calendar quarterpetrol (high octane) / diesel price as on last day of every month

Other Centres
All Centres

b) Certificate basis: (Amount in ` ) ii. Who do not own vehicles-Certificate

basis

1040 750 13 450

1700 1250 70

2. Cleansing Material (Monthly) (w.e.f 01.01.2010 / 01.12.2011) Casual Labour (per day) 3. 4. Provision of News paper & Magazines (Monthly)

All Officers (certificate basis) who availed 1/3 furniture-(w.e.f 01.08.11) All Officers on certificate basis (w.e.f 01.09.2011) 5. Entertainment Expenses {2011- Officers Budgetary positions Operational positions 12} On certificate basis (Per Annum) Other Officers

17000 20800 12000 14800 7000 3000 2000 2000 29500 26500 20000 15000 10000 8000 30500 27500 21000 16000 11000 9000 (300) 697 8800 3500 2500 3000 32500 27000 21000 16000 11000 9000 33500 28000 22000 17000 12000 10000

a) Personal incurred on tea, b) Expenses

coffee, cold- drinks, snacks etc.,
Full years entitlement on retirement

Officers Budgetary positions Operational Positions

Officers at LHO, ZO & others Officials in BPR initiatives 6. Residential Accommodation Mumbai i. Monthly rental ceilings-w.e.f Delhi 01.07.201 2 Other Major A Centres $ Inclusive of Car parking / A-Population > 7.5 lacs maintenance (Out of the ceilings, a maximum 25% will B-Population > 2 & < 7.5 lacs C-Population < 2 lacs be available for car parking / society/ maintenance / security charges). Mumbai Ceilings applicable to A centre shall be Delhi applicable to project area centres, Other Major A Centres $ centres where B&Os established & A-Population > 7.5 lacs State capitals (if not in Major A). B-Population > 2 & < 7.5 Brokerage paid @ one month rentals on lacs C-Population < 2 lacs production of receipt. 7. Telephone Reimbursement- No. of calls p.m in brackets (carry over up Monthly MMGS II & above irrespective of to the end of calendar quarter) their positions; JMGS I - BMs & other Call charges+Rent+taxes (12.36%) in ` RM/ BM/DM Rel. OTHER OFFICERS Mgr RMSE RMMEs
officers who are permitted (Base BSNL p.m Rates) (w.e.f 01.02.2010) (Internet with in the ceiling) 8. Provision of Mobile Phones All officers (JMGS I who have two years i. Cost of Two Mobile sets excl. of taxes service ii. Monthly plans/rentals excl. of taxes-2 SI & PO/TOs on completion of one year) Ms iii.Monthly charges excl. of rent / * ` 2000 for RMs, CPC Heads & other budgetary assignments. Mobile sets to be taxes-2 SIMs replaced in DEL, KOL & CHE) Major Aonce - (MUM, 9. Halting Allowance Per Day 3 years. (w.e.f 01.12.2011) (w.e.f 01.05.2010) Major A - (AHM, BAN & HYD Cities)

4500 34500 39500 29500 32500 23000 26000 18000 21000 12000 14000 11000 12000 35500 41500 30500 34500 24000 28000 19000 23000 13000 16000 12000 14000

(450) 540+260+82 = 899 15000 700 700 600 600

10000 12000 500 500

1000 1200 800 1000 Area I Visakhapatnam 700 800 Other Places 600 700 Eligibility to stay in ITDC Hotels 1 Star 2 Star Non A.C 3 Star A.C 10. Lodging Expenses Maximum room tariff permissible per day Major A-4 Metros 2200 3200 [200] 6000 [300] in Non- ITDC Hotels 5500 [300] Major A-All State Capitals other than Metro 2000 2900 [200] # Area I - Visakhapatnam in Hyd. Circle 1500 2200 [100] 3000 [200] (w.e.f 01.02.2012) 1200 1600 [100] 2500 [100] [ ] # Increase `100 only in first year i.e Other Places Increase Feb13 in lodging expenses every year i.e from Feb 2013 to 2016 @ `100 for JMGS I at all centres and for others mentioned in [ ] 11. Furniture & Fixtures Scheme All officers (including on probation) who Life span: Furniture(10) years, electronic items(w.e.f Sep. 07 & revised in April 10) reside in own / rented / leased house; have to (5) years utilize (For mattresses, & batteries 175000 (3) years) 100000 curtains 110000 50% of overall entitlement on furniture items. 90000 a) Over all limit

Sub-limit for Curtains

b) Furniture Maintenance Charges
who availed for before 31st March of previous Sub-limit Inverter batteries year & also availed 50% of 11 (a) as above

No restriction on the quantity of items. Depreciation will be on monthly basis at the 9000 time of retirement. All items running on electricity are electronic items except physical fitness Once items. in a year January of every year 9000 (February to January) w.e.f 01.01.2008 Proportionate charges on retirement. All officers once in 3 years from the date of 2400 purchase on production of bill

10000 Up to ` 9000 10000 11000

15000

12000

12. Supply of Briefcase

(w.e.f 01.07.2011)

3100 10000

4000 15000

13. Silver Jubilee Award

(w.e.f 16.03.2011)

All Officers on completion of unblemished service of 25 years

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14. Memento (w.e.f 16.03.2011) 15. Lump-sum Expenses on Transfer i. Packing, insurance & local transport ii. One time lump sum-Admission fee in schools / colleges Max. two wards iii. Loading & unloading charges (on production of receipt)

On Retirement

6250

10000 25000

20000 All Officers who have shifted house hold articles to the place of posting For all scales, an additional amount of ` 10000, (w.e.f 01.07.2011)
Metro / Urban / S.U / Rural up to ` (Rate as per the place of posting)

in case of administrative transfer outside the circle

10000 per ward 7000 / 6000 / 5000 / 3000

15000 per ward 10000/8000/6000/4000

TO 1

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TYPES OF ALLOWANCES GIVEN IN NTPC

DEARNESS ALLOWANCE (For Executives, Supervisors & Workmen) The Dearness Allowance in the revised pay scales as on 1-1-97 shall be zero, w.e.f. 1.4.97, the DA payable would be governed as per the following provisions: (a) Dearness Allowance would be revised on 1st April, 1st July, 1st October and 1st January of each year based on the percentage increase in the quarterly average of the AICPI for the Quarters ending February, May, August and November respectively over AICPI 1708. (Basic 1960=100) (b) There shall be 100% neutralization of DA for all employees. Based on the revised DA scheme, the payment Dearness allowance w.e.f 1.1.97 is enclosed at Annexure A. (c) DA shall be payable on Basic pay and special pay, if any

CITY COMPENSATORY ALLOWANCE Employees borne on the regular establishment of the Company other than those appointed on casual/daily rated/daily but monthly paid basis; will be paid City Compensatory Allowance at the rates, as given here under: i) EXECUTIVES & SUPERVISORS:

CCA will be paid as per the following rates, w.e.f 01.08.97, based on the revised classification of cities as announced by the Government of India: (Amount Rs. per Month) (As per being informed by a reliable source in HR in the organization) BP Month (Rs.) 4001-5250 5251-6499 6500-above A-1 City A City B-1City B-2City

125 200 300

95 150 240

65 100 180

35 65 120

However, in case of any workmen if the revised amount becomes less than the existing amount the existing amount will be paid on protection basis to such workmen. The term 'Pay', as above, includes in addition to basic pay, special pay, personal pay, deputation (duty) pay. CCA at the above rates will be admissible from the date of joining duty at the places mentioned above. Payment of CCA at the above rates will be governed and regulated by the same terms, conditions and rules, as laid down in the
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Govt. of India, Ministry of Finance, and Office Memorandum No. F2 (37)-E.II (B)/64 dated 27.11.1965 as amended or modified from time to time.

HOUSE RENT ALLOWANCE RULES House Rent Allowance is payable to the eligible employees who are not pro- vided with the residential accommodation by the Company at the places where the Company has its Projects/Units/Offices etc. APPLICABILITY For the purpose of House Rent Allowance, the employees eligible are those borne on the regular establishment of the Company including probationers, lien holders, deputationists (unless otherwise specified in their terms of deputation) and persons appointed on contract basis (unless otherwise specified in the terms of their contract) but excluding apprentices/trainees whether engaged under Company's own training scheme or under the Apprentices Act, 1961 (save to the extent specifically mentioned in these Rules) and muster roll, daily rated, casual, badli or substitute employees.

DEFINITIONS In these rules, unless the context otherwise requires: "Company" means the National Thermal Power Corporation Limited including the offices/projects/units under its management. "Places" means A1, A, B-1, B-2 & C Class cities notified by the Government of India for the purpose of payment of HRA to the Central Govt. employees, from time to time and other unclassified localities. "Family" means employee's spouse, legitimate children and step children (including legally adopted children) and parents (parents-in-law in case of female employees). Only one spouse is included in the term "Family". Grade A1 B-1, B-2 C Unclassified Percentage of basic pay 30% 15% 7.5% 5%

CONVEYANCE ALLOWANCE/REIMBURSEMENT/ADVANCES Conveyance allowance at NTPC was different for Executives, supervisors and workers. It is as follows Transportation allowance per month for car E7 & Above Rs. 800
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E5-E6 Rs. 800 E2A-E4 Rs. 800 E1-E2 Rs. 800 Scooter/Motor cycle

Executives Rs. 800 Selection grade Rs. 800 W8-W11/S1-S4 Rs. 800 W1-W7 Rs. 585

Moped All Executives Rs. 645 Selection Grade Rs. 510 W8-W11/S1-S4 Rs. 480 W0-W7 Rs. 400 Not owning any vehicle Executive & SG Rs. 500 W8-W11 & S1-S4 Rs. 400 W0-W7 Rs. 325 Transportation allowance for blind or orthopedically handicapped employees Executives & SG Rs. 1000 W8-W11/S1-S4 Rs. 800 W0-W7 Rs. 650 Conveyance reimbursement (per month) For Car E7 & Above Rs. 3035 E5-E6 Rs. 2690 E2A-E4 Rs. 2350 E1-E2 Rs. 1640 For Scooter/ Motor cycle Executives Rs. 385 Selection grade Rs. 385 W8-W11/S1-S4 Rs. 80 Conveyance advance for car, scooter, motorcycle and moped would be paid only up to 90% of the total cost of the vehicle.
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CHILDREN EDUCATION ALLOWANCE Over and above Rs. 75 per month per child reimbursement. (Rs. 225 per month per child where CCA is not payable.) Over and above Rs. 75 per month per child reimbursement. (Rs. 340 per month per child where CCA is payable.) Hostel subsidy at Rs. 1500 per month per child. MEDICAL BENEFITS Free treatment in NTPC Hospital/ Dispensaries/ company hospital/ full reimbursement in notified or empanelled hospitals/ in non-empanelled hospitals reimbursement limited to ceilings notified as per the rules. LEAVE TRAVEL ALLOWANCE ELIGIBILITY Staff will be entitled to LTA on completion of one year of service subject to confirmation of services For journeys performed by Air: Economy fare of airlines by the shortest route to the place of destination

31

CONCLUSION Improved Productivity and Profitability, One main advantage of using employee allowance is an increase in productivity and profitability Recruitment and retention are among the most prominent reasons that companies invest in employee allowance plans. It is one way in which these businesses attract new talent away from competitors and keep existing staff with proven skills and value. This is a key bargaining chip, as allowances like medical allowances important to the well-being of employees. Cost Disadvantages Advantages of a Healthier Staff Allowance also help in motivating the employees Due to tax exemption on certain allowances, it proves to be beneficial for the employees

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