Pensioners Won : No More Commutation Deduction after 11 Years

During retirement, a portion of your pension can be commuted to maximum 50% of your basic pension.  The commuted value of the pension so fixed at the time of retirement is paid to the pensioners as a lump sum amount.  

This amount is recovered for the long duration i.e 15 years.  Government has set a time limit of 15 years for recovery of the commuted value of pension paid after retirement. This was based on the prevailing interest rate of 12%. The interest rate has been declining since 2006, reaching 8% in 2010 and currently hovering around 7%. 

Considering the financial loss to pensioners, Two veterans including Shri RS Jindal, retired Secretariat Superintendent, calculated that the entire amount of commutation of 8% would be recovered in 10 years and 8 months. If the recovery is allowed to continue, the government finds itself prosperous, its value rising to 18.3%. 

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Therefore, They have filed separate petitions. In the case of Mr. Jindal, the Court passed orders staying future recovery in CWP 2490/2024 on 09/02/2024.   Another petition 8222/2024 was heard on 15/04/2024 and orders were passed to stop future recovery. 

Everyone should know this. To get the benefit of the orders passed by the court, you may file a court case, if desired , preliminary at CAT / AFT as the case may be.  With reference to the court orders, there is a possibility to get a stay order on deduction of the Commuted portion above 11 years.

108 CWP-2490-2024
Present: Mr. Ishan Kaushal, Advocate, for the petitioner. 
***** Notice of motion for 09.04.2024. 

Mr. Saurabh Kapoor, Addl. A.G., Punjab accepts notice on behalf of State and seeks time to file reply. May do so, on or before the next date of hearing with a copy in advance to the counsel opposite. In the meanwhile, further recovery shall remain stayed. 
Tag along with CWP-9426-2023. 

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