Overpayment

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  1. AKD

    AKD Member

    I want to know if there is any provision in the Income Tax Act to deal with the following very peculiar problem which I am facing for no fault of mine.
    I am a pre-sixth central pay commission retired officer. My basic pension was revised wef 01.01.2006 following 6CPC recommendations. However, arrear pension was not allowed from that date by the Govt incase of such retired employees. Revised pension was fixed only notionally from 01.01.2006 and arrear was allowed from a date six years later.
    In pursuance of a favourable order by the Hon'ble Apex Court after protracted legal battles by retired central govt employees' associations, the GOI issued orders for payment of arrear wef 01.01.2006 a few months back.
    My predicament began at this point. The local tresury is the disbursing authority of my pension which is credited to my pension account in the SBI every month through NEFT. Along with the monthly pension of January 2016 (FY 2015-16), arrear pension was credited for the entire period from 01.01.2006 to Sept 2012. However, due to some serious mistake to calculate quantum of arrear, treasury made overpayment of a large amount to which I am not entitled.
    I brought this matter to the notice of the treasury asking them to go through the entire records of pension disbursement month by month since Jan 2006 to locate the source of mistake. This has not been resolved till now because of preoccupation of the concerned officers and staff with the Assembly elections.
    However, I am writing to the treasury to recover this excess amount from my monthly pension in the current FY (2016-17) and pointing out where the mistake has taken place according to my suspicion.
    But, my problem will not end there. It is about amount of income tax.
    Am I required to pay tax in FY 2015-16 (AY 2016-17) taking into account this overpayment?
    If yes, I stand to loose 10% of this amount because my taxable income in FY 2015-16 is in the 30% slab, while it will remain in the 20% slab in FY 2016-17.
    Another point is relevant in this matter. Treasury does not deduct tax at source(TDS) on pension.
    I pay that as self assessment tax.
    Is there any provision in the Income Tax Act to deal with this unique case to save me from this loss?
     
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