CHAPTER II COMPULSORY DEPOSIT OF ADDITIONAL EMOLUMENTS by India Bareacts - Indian Bare Acts - Law Firm - Lawyer - India Bare Acts

Title : THE ADDITIONAL EMOLUMENTS (COMPULSORY DEPOSIT) ACT, 1974

Year : 1974

Act :

CHAPTER II

COMPULSORY DEPOSIT OF ADDITIONAL EMOLUMENTS

5.Additional Wages Deposit Account and Additional Dearness AllowanceDeposit
Account.

5. Additional Wages Deposit Account and Additional Dearness
Allowance Deposit Account. (1) There shall be opened by such authorities as may be specified in the scheme two separate accounts, to be known, respectively, as the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account, and different authorities may be specified for different establishments or different categories of employees or establishments.

(2) The specified authority shall, in relation to each Deposit
Account, open a separate ledger account in the name of each employee in relation to whom any contribution is made to the said Account, and credit the contributions so made in the said ledger account.

6.Duty of employer or other person to make deductions of additionalwages and additional dearness allowance from emoluments.

6. Duty of employer or other person to make deductions of additional wages and additional dearness allowance from emoluments.
(1) For the purposes of this Act, the deductions specified in sub-
section (2) shall be made,-

(a) in the case of additional wages, for a period of one year from the appointed day; and

(b) in the case of additional dearness allowance, for a period of 1[three years] from the appointed day.

(2) On the commencement of this section,-

(a) every employer, who draws, from the Consolidated Fund of India or of any State or of any Union territory having a
Legislative Assembly, and disburses, after the appointed day, emoluments of an employee to whom this Act applies, shall, as and when emoluments are disbursed by him for any period, deduct from the emoluments so disbursed, the whole of the additional wages and one-half of the additional dearness allowance and credit the amount so deducted, in accordance with the scheme, to the Additional Wages Deposit Account and the Additional Dearness Allowance Deposit Account, respectively;

(b) every other employer, who disburses, after the appointed day, emoluments to any employee to whom this Act applies, shall, as and when emoluments are disbursed by him for any period, deduct from the emoluments so disbursed, the whole of the additional wages and one-half of the additional dearness allowance, and shall remit, in accordance with the scheme, the amounts so deducted to the nominated authority and on receipt of such amounts the nominated authority shall credit the amounts so received to the Additional Wages
Deposit Account and the Additional Dearness Allowance Deposit
Account, respectively
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1 Subs. by Act 74 of 1976, s. 2 (w.e.f. 11.6.1976).

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504.(c) any employee, to whom this Act applies, who draws, after the appointed day, his own emoluments shall,-

(i) if he is employed in an establishment owned or maintained by Government, make deductions from his salary bill in respect of the whole of the additional wages and one-half of the additional dearness allowance and the specified authority shall credit the amount so deducted, in accordance with the scheme, to the
Additional Wages Deposit Account and the Additional
Dearness Allowance Deposit Account, respectively;

(ii) if he is employed in any other establishment, remit the whole of the additional wages and one-half of the additional dearness allowance, in accordance with the scheme, to the nominated authority, and on receipt of such amount, the nominated authority shall credit the amount so received to the Additional Wages
Deposit Account and the Additional Dearness Allowance
Deposit Account, respectively.

Explanation.-In computing the amount to be credited to the Addi-
tional Wages Deposit Account and the Additional Dearness Allowance
Deposit Account. the amount contributed [in relation to such additional wages or additional dearness allowance shall not-

(a) to the extent of the contribution which is compulsorily required to be made to any provident or other fund under any law for the time being in force; or

(b) to the extent of the contribution made to any other provident fund, recognised under any other law for the time being in force, at a rate not exceeding the rate at which such contribution was being made immediate before the appointed day,

be taken into account.

(3) The specified authority shall, as soon as may be practicable after the end of each year, prepare separately, in relation to the amounts credited to the respective Deposit Accounts to the credit of each employee, and furnish to the employee a copy of the said accounts showing therein the amounts credited thereto in relation to the employee.

7.Deposit to carry simple interest.

7. Deposit to carry simple interest. (1) Every amount credited under section 6, in relation to an employee in a Deposit Account, shall carry simple interest at a rate, which shall be two and a half per cent. over and above the bank deposit rate.

(2) The interest due on the amount credited in any Deposit
Account shall be calculated in such manner as may be specified in the scheme.

(3) Interest accruing on amounts credited under section 6 to any
Deposit Account shall ensure to the benefit of the employees in relation to whom such amounts have been credited.

(4) For the purpose of the deductions under section 80L of the
Income-tax Act, 1961, (43 of 1961.) interest received on a deposit under this Act shall be deemed to be interest received on a deposit with a banking company to which the Banking Regulation Act, 1949, (10.of 1949.) applies.

8.Assessment for ------ purpose of income tax.

8. Assessment for ------ purpose of income tax. (1) For the purposes of computing, under the Income-tax Act, 1961, the total income of an employee, the amount credited to his ledger account in the Additional Wages Deposit Account or the Additional Dearness
Allowance Deposit Account Shall not be included in his total income of the previous year in which it is so credited; but so much of

505.the amount as is repaid to him shall be liable to be included in his total income of the previous year in which it is repaid.

(2) For the purposes of computing, under the Income-tax Act,
1961, (43 of 1961.) the total income of an employee, the amount repaid to him under this Act shall be deemed to be salary paid to him in arrears and the provisions of sub-section (1) of section 89 of that
Act shall apply accordingly

Explanation.-In this section, "previous year" and "total income have the meanings respectively assigned to them in the Income-tax Act
1961. (43 of 1961.)

9.Repayment of deposits.

9. Repayment of deposits. (1) Subject to the provisions of sub-
section (2), every amount credited to the Deposit Accounts shall be repayable with interest due thereon,--

(a) in the case of an amount credited to the Additional
Wages Deposit Account, at any time after the expiry of one year from the appointed day; and

1[(b) in the case of an amount credited to the Additional
Dearness Allowance Deposit Account,-

(i) for any period ending on the 30th day of June,
1976, in cash, at any time after the expiry of two years from the appointed day; and

(ii) for any period ending after the 30th day of June,
1976,-

(a) by crediting tithe provident fund account of the employee, at any time after the expiry of a period of four years from the appointed day, if such employee is a subscriber to any provident fund;

(b) in cash, at any time after the expiry of a period of four years from the appointed day, in the case of an employee who is not a subscriber to any provident fund:]

Provided that nothing in this section shall prevent earlier repayment of any amount credited to either of the Deposit Accounts with interest due thereon in any case in which any person authorised by the Central Government in this behalf is satisfied that extreme hardship will be caused unless such repayment is made:

Provided further that an employee may, at his option, retain the whole or any part of the amount, credited in relation to him in the
Additional Wages Deposit Account or the Additional Dearness Allowance
Deposit Account, or both, until his superannuation or until such date as may be specified by the Central Government in this behalf:

Provided also that the whole of the amount standing to the credit of an employee (not being an employee in a seasonal establishment) in
1[the additional Wages Deposit Account shall be repaid to him in cash."] on his 1[the Additional Wages Deposit Account shall be repaid to him in cash] superannuation or resignation from office or on the termination of his employment.

(2) The aggregate amount credited to 1[any Additional Wages
Deposit Account] relation to an employee shall be repaid to the employee in five equal annual instalments commencing from the expiry of one year ***1 from the appointed day, together with interest due on the whole, or, as the case may be, part of the amount of compulsory deposit which remains unpaid.

1[(3) The aggregate amount credited to the Additional Dearness
Allowance Deposit Account by or in relation to an employee for the period ending on the 30th day of June, 1976, shall subject to the provisions of sub-section (5), be repaid, in cash, to the employee in five equal annual instalments commencing from the expiry of a period of two years from the appointed day,. together with interest due on the whole or, as the case may be, part of the amount of compulsory deposit which remains unpaid.

(4) The aggregate amount credited to the Additional Dearness
Allowance Deposit Account by or in relation to an employee for the period commencing on the 1st day of July, 1976, and ending on the 5th day of July, 1977, together with interest due on the whole, or, as the case may be, part of the amount of compulsory deposit which remains unpaid, shall, subject to the provisions of sub-section (5), be repaid to the employee in five, equal annual instalments commencing on the
6th day of July, 1978, and each such instalment shall be credited to the provident fund account of the employee:

Provided that the employer shall not be required to make any contribution under the Employees Provident Funds Act, 1952, or under any other law for the time being in force, in relation to the amounts so credited to the provident fund account of the employee:

Provided further that, in the case of the employees who do not subscribe to any provident fund, the aggregate amount so repayable shall be repaid in cash in five equal annual instalments commencing on the 6th day of July, 1978.(5) On the superannuation, resignation or termination of employment of an employee, the whole of the amount standing to the credit of such employee in the Additional Dearness, Allowance Deposit
Account, shall be repaid,-

(a) in cash, in the case of any amount credited to the
Additional Dearness Allowance Deposit Account for any period ending on the 30th day of June, 1976;

(b) in the case of any amount credited to the Additional
Dearness Allowance Deposit Account for any period ending, after the 30th day of June, 1976,-

(i) by crediting such amount-to the provident fund account of such employee, if he is the subscriber of any such account, or

(ii) in cash, where such employee is not a subscriber to any provident fund.

Explanation.-For the purposes of this section, "provident. fund"
has the meaning assigned to it in section 2(e) of the Provident Funds
Act, 1925.]

10.Power of Central Government to frame scheme.

10. Power of Central Government to frame scheme. (1) The Central
Government shall, by notification, frame one or more schemes in relation to the amounts credited to the Deposit Accounts under this
Act.

(2) A scheme framed under sub-section (1) may provide for-

(a) the authorities by which the Additional Wages Deposit
Account and the Additional Dearness Allowance Deposit
Account, shall be opened and maintained;

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1 Subs. Omitted & ins. by Act 74 of 1976, s. 3 (w.e.f. 11-6-
1976).

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29 Law-65.

506.(b) the time and manner in which amounts deducted from additional wages or additional dearness allowance shall be deducted and credited to the respective Deposit Account;

(c) the documents to be issued to persons in relation to whom amounts have been credited to the Deposit Accounts as evidence of such credit;

(d) authority or authorities by or through which credits to the Deposit Accounts may be made;

(e) the accounts to be maintained with respect to the amounts credited to the Deposit Accounts and the officer by whom such Accounts shall be maintained;

(f) the nomination of persons to receive the amount standing in a Deposit Account to the credit of an employee in the event of his death, and cancellation or change of such nomination;

(g) the issue of duplicate of any document issued as evidence of any credit in the event of loss or destruction of the original and the fee, not exceeding rupees two, on the payment of which such duplicate may be issued;

(h) repayment of amounts credited to the Deposit Accounts with interest due thereon and the conditions, if any, under which such repayment may be made;

(i) any other matter which may be necessary or proper for the effective implementation of the scheme.

(3) A scheme framed under this section may provide that all or any of its provisions shall take effect, either prospectively or retrospectively, on such date, not being a date earlier than the appointed day, as may be specified in this behalf in the scheme and every scheme framed under this section shall have effect notwithstanding anything contained in any law (other than this Act)
for the time being in force or in any instrument having effect by virtue of any enactment other than this Act.

(4) The Central Government may make a scheme to add to, amend or vary any scheme framed under sub-section M.

11.Rounding off.

11. Rounding off. Where the amount of any credit to be made in any Deposit Account contains a part of a rupee, then, such part, if it is fifty paise or more, shall be increased to one complete rupee and if it Is less than fifty paise, it shall be ignored.

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