|Senior Citizen and Very Senior Citizen|
|FAQs on Pension Payment by Banks|
Pension is described in section 60 of the CPC and section 11 of the Pension Act as a periodical allowance or stipend granted on account of past service, particular merits etc. There are three important features of 'pension'. Firstly, pension is a compensation for past service. Secondly, it owes its origin to a past employer-employee or master-servant relationship. Thirdly, it is paid on the basis of earlier relationship of an agreement of service as opposed to an agreement for service. This relationship terminates only on the death of the concerned employee.
Pension received from a former employer is taxable as 'Salary'. Hence, the various deductions available on salary income, are also available to pensioners.
Pension to officials of UNO is exempt from taxation.
Family pension is defined in Section 57 as a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his/her death. Pension and family pension are qualitatively different. The former is paid during the lifetime of the employee while the latter is paid on his/her death to surviving family members. However, in case of family pension, since there is no employer-employee relationship between the payer and the payee, therefore, it is taxed as 'Income from Other Sources' in the hands of the nominee(s). In respect of family pension, deduction u/s 57(iia) of Rs. 15000/- or 1/3rd of the amount received whichever is less, is available.
Under the Income Tax Act, a Senior Citizen is a person who at any time during the previous year has attained the age of 60 years or more and a Very Senior Citizen is a person who at any time during the previous year has attained the age of 80 years or more. There are certain benefits available to Senior Citizen and Very Senior Citizen under the Income Tax Act.
Yes. Even the Government employees drawing their pension from a treasury or from a post office can opt to draw their pension from the authorized bank's branches.
The Ministry/ Department /Office where the Government servant last served is the pension sanctioning authority. The pension fixation is made by such authority for the first time and thereafter the refixation of pay, if any, is done by the pension paying bank based on the instructions from the Central/ State Government authorities.
The pensioner is not required to open a separate pension account. The pension can be credited to his or her existing savings/ current account maintained with the branch selected by the pensioner.
Yes. Pensioners can open Joint Account with their spouses.
The Joint Account of the pensioner with spouse can be operated either by "Former or Survivor" or "Either or Survivor".
RBI has not stipulated any minimum balance to be maintained in pension accounts by the pensioners. Individual banks have framed their own rules in this regard. However, some of the banks have also permitted zero balance in the pensioners' accounts.
The concerned pension paying authorities in the Ministries /Departments/ State Governments forward the PPOs to the bank branches wherefrom the pensioner desires to draw his/her pension.
The disbursement of pension by paying branch is spread over the last four working days of the month depending on the convenience of the pension paying branch except for the month of March when the pension is credited on or after the first working day of April.
(a) Pensioner can transfer his/ her pension account from one branch to another branch of the same bank within the same center or at a different centre;
(b) He/ She can transfer his/ her account from one authorized bank to another within the same centre (such transfers are allowed only once in a year);
(c) He/ She can also transfer his/ her account from one authorized bank to another authorized bank at different centre.
Pension will be paid on the basis of the photocopy of the pensioner's PPO at the transferee (new) branch from the date of the last date of payment made at the transferor (old) branch. During this time, both the branches (old and new) are required to ensure that all the required documents are received by the transferee branch within a period of three months.
Yes. Before the commencement of pension, a pensioner has to be present at the paying branch for the purpose of identification. The paying branch shall obtain the specimen signatures or the thumb/toe impression of the pensioner.
If the pensioner is physically handicapped/incapacitated and unable to present at the branch, the requirement of personal appearance is waived. In such cases the bank official visits the pensioner's residence/hospital for the purpose of identification and obtaining specimen signature or thumb/toe impression.
Yes. The pensioner has right to retain half portion of the PPO for record and whenever there is a revision in the basic pension/DR etc. the paying branch has to call for the pensioner's half of the PPO and record thereon the changes according to government orders/notifications and return the same to the pensioner.
Yes. The pension paying branch is required to maintain a detailed record of pension payments made by it from time to time in the prescribed form duly authenticated by the authorized officer.
Yes. The paying branch before commencement of pension obtains an undertaking from the pensioner in the prescribed form for this purpose and therefore, can recover the excess payment made to the pensioner's account due to delay in receipt of any material information or due to any bonafide error. The bank has also right to recover the excess amount of pension credited to the deceased pensioner's account from his/ her legal heirs/nominee.
Yes. The pensioner is required to furnish a Life Certificate/Non - Employment Certificate or Employment Certificate to the bank in the month of November. However, in case a pensioner is unable to obtain a Life Certificate from an authorized bank officer on account of serious illness / incapacitation, bank official will visit his/her residence/ hospital for the purpose of recording the life certificate.
The account is not allowed to be operated by a holder of Power of Attorney. However, the cheque book facility and acceptance of standing instructions for transfer of funds from the account is permissible.
The pension paying bank is responsible for deduction of Income Tax from pension amount in accordance with the rates prescribed by the Income Tax authorities from time to time. While deducting such tax from the pension amount, the paying bank will also allow deductions on account of relief to the pensioner available under the Income Tax Act. The paying branch will also issue to the pensioner in April each year a certificate of tax deduction as per the prescribed form. If the pensioner is not liable to pay Income Tax, he should furnish to the pension paying branch, a declaration to that effect in the prescribed form (15 H).
A pensioner, who is old, sick or lost both his / her hands and, therefore, can not sign, can put any mark or thumb/ toe impression on the form for opening of pension account. While withdrawing the pension amount he/ she can put thumb/toe impression on the cheque/withdrawal form and it should be identified by two independent witnesses known to the bank one of whom should be a bank official.
In such cases, a pensioner can put any mark or impression on the cheque/ withdrawal form and may indicate to the bank as to who would withdraw pension amount from the bank on the basis of cheque / withdrawal form. Such a person should be identified by two independent witnesses. The person who is actually drawing the money from the bank should be asked to furnish his/ her specimen signature to the bank.
The family pension commences after the death of the pensioner. The family pension is payable to the person indicated in the PPO on receipt of a death certificate and application from the nominee.
Whenever any additional relief on pension/family pension is sanctioned by the Government, the same is intimated to the agency banks for issuing suitable instructions to their pension paying branches for payment of relief at the revised rates to the pensioners without any delay. The orders issued by Govt. Departments are also posted on their websites and banks have been advised to watch the latest instructions on the website and act accordingly without waiting for any further orders from RBI in this regard.
Yes. As decided by the Central Government (Civil, Defence & Railways), pension paying banks have been advised to issue pension slips to the pensioners in prescribed form when the pension is paid for the first time and thereafter whenever there is a change in quantum of pension due to revision in basic pension or revision in Dearness Relief.
A pensioner can initially approach the concerned Branch Manager and, thereafter, the Head Office of the concerned bank for redressal of his/her complaint. They can also approach the Banking Ombudsman of the concerned State in terms of Banking Ombudsman Scheme 2006 of the Reserve Bank of India (details available at the Bank's website www.rbi.org.in) This is applicable only in respect of complaints relating to services rendered by banks. For other issues the complainant will have to approach the respective pension paying authority.
The pensioner can visit the Official Website of the concerned Government Department as also Reserve Bank of India Website (www.rbi.org.in) to get the information about pension related issues.
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The visitors may visit the web site of Income Tax Department for resolving their doubts or for clarifications.
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