ACTS AND RULES

Q 1. What is a sub-station as per electricity act 2003?

Ans: According to the Electricity Act of 2003, a substation is defined as a station for transforming or
converting electricity from high voltage to low voltage or vice versa or transmitting electricity from
one voltage level to another, and includes transformers, switchgear, and other works necessary for
that purpose. Substations play a crucial role in the transmission and distribution of electricity,
ensuring that it is delivered efficiently and safely to consumers at various voltage levels.

Q 2. Who is a dependent as per workmen’s compensation Act 1923?

Ans: The Workmen's Compensation Act of 1923, although originating in India, has served as a model
for similar legislation in other countries. Under this act, a dependent typically refers to individuals
who are eligible to receive compensation in the event of a work-related injury or death of the
primary breadwinner. Dependents can include:

(i) Spouse: The husband or wife of the deceased worker.

(ii) Children: Biological or adopted children of the deceased worker who are below a certain age
(usually 18 or 21) or incapacitated.

(iii) Parents: Dependent parents of the deceased worker who were wholly or partially dependent on
the deceased worker's earnings.

(iv) Siblings: In some cases, siblings who were dependent on the deceased worker may also be
considered dependents.

The specifics of who qualifies as a dependent and the extent of their dependency vary depending on
the jurisdiction and the provisions of the particular Workmen's Compensation Act in force.

Q 3. What is a family as per GPF rule?

Ans: Family means:

In the case of a male or female subscriber, the wife or wives or husband, parents, children,
minor brothers, unmarried sisters, deceased son’s widow and children and where no parents of the
subscriber is alive, a paternal grandparent:

Q4. Guidelines for DDO under NPS.

Ans: The guidelines for Designated Depositary Office (DDO) under the National Pension System
(NPS) in India were primarily governed by the Pension Fund Regulatory and Development Authority
(PFRDA). Guideline:

(i) Contribution Remittance: DDOs are responsible for collecting NPS contributions from the
salaries of employees and remitting them to the respective Pension Fund Managers (PFMs) within
the stipulated time frame.
(ii) Record Keeping: DDOs are mandated to maintain accurate records of NPS contributions,
including employee-wise details, contribution amounts, and remittance dates.

(iii) Reporting: Regular reporting to the PFRDA or its designated agencies regarding NPS
contributions, compliance status, and other relevant information is typically required from DDOs.

(iv) Employee Communication: DDOs are often responsible for communicating relevant
information about NPS, such as enrollment procedures, investment options, and benefits, to the
employees.

(v) Audit and Inspection: DDOs may be subject to periodic audits or inspections by the PFRDA or
its designated agencies to ensure adherence to regulatory requirements.

Q5. Mention the maximum limit which can be granted towards non-refundable advance from the
GPF accumulation of the subscriber.

Ans: The basic criterion for the non-refundable withdrawal is that you should have completed at
least 15 yrs of service or within 10 yrs of the date of retirement or superannuation (whichever is
earlier). The GPF withdrawal rules are as follows.

(i) 75% of the outstanding PF account balance can be withdrawn to fund education or any event like
marriage (self or dependent family members).

(ii) 90% of the outstanding amount can be withdrawn in the case of any medical emergency for self
or a dependent family member. Such amount can be received within 7 days.

(iii) 75% of the account balance can be withdrawn to purchase a new house or land, renovate/repair
it or repay an existing home loan.

(iv) Withdraw of 75% of the balance or 3/4th of the vehicle value (whichever is lower) to purchase a
vehicle, pay off a car loan, or repair the car is permitted.

(v) 90% of the balance can be withdrawn before 2 yrs of retirement without providing any reason.

(vi) Funds can be withdrawn to purchase large home appliances like air conditioners or washing
machines. However, the funds must be used only to purchase the products as stated on the
withdrawal form.

(vii) The nominee can withdraw the outstanding amount in the event of the subscriber’s death. They
are also entitled to an additional amount of an average of 3 yrs PF balance preceding the event. This
additional amount should not be more than Rs. 60,000. Also, as per the GPF part final withdrawal
rules, the nominee will be eligible for the additional fund only if the subscriber has been in service
for a minimum of 5 yrs.

(viii) At the time of retirement or superannuation, the subscriber is allowed to withdraw the entire
amount.
Q6. What is the rate of contribution towards NPS and on what portion of the salary of an employee
is deductible?

Ans: Both the employee and the employer contributes towards NPS.

(i) Employee Contribution: Employees can contribute up to 10% of their salary (basic salary plus
dearness allowance) towards NPS. This contribution is eligible for tax deduction under Section
80CCD(1) of the Income Tax Act, 1961.

(ii) Employer Contribution: Employers can also contribute towards the NPS on behalf of the
employee. For central and state government employees the employer’s contribution is 14% of the
employee’s salary (basic salary plus dearness allowance) towards NPS while for the private sector
employees, this contribution is 10%. This contribution is eligible for tax deduction under Section
80CCD(2) of the Income Tax Act, 1961. However, the maximum deduction allowed under Section
80CCD(2) cannot exceed 10% of the employee's salary (basic salary plus dearness allowance).

Q7. National Pension Scheme Withdrawal Rules After Retirement (60 years).

Ans: Presently, a person can withdraw up to 60% of the total corpus as a lump amount, with the
remaining 40% going into an annuity plan. Subscribers can withdraw the entire corpus if it is less
than or equal to Rs 5 lakh without purchasing an annuity plan under the new NPS guidelines. These
withdrawals are also tax-free.

Q8. National Pension Scheme Early Withdrawal or Exit rules.

Ans: (i) Upon Superannuation - When a subscriber reaches the age of Superannuation/reaches the
age of 60, he or she must use at least 40% of the accrued pension corpus to purchase an annuity
that provides a regular monthly pension. The remaining monies are available for withdrawal as a
lump payment.

(ii) Subscribers can take a 100% lump sum withdrawal if their entire accrued pension corpus is less
than or equivalent to Rs.5 lakh.

(iii) Pre-mature exit - In the event of a premature exit (before reaching the age of
superannuation/turning 60), at least 80% of the Subscriber's accrued pension corpus must be used
to purchase an Annuity that provides a regular monthly income. If the total corpus is less than or
equal to Rs.2.5 lakh, the subscriber can opt for 100% lump sum withdrawal.

(iv) Upon the death of the subscriber - Following the subscriber's death, the entire accrued pension
corpus (100%) would be paid to the subscriber's nominee/legal heir.

Q9. Mention few authorised deductions under payment of wages act 1963.

Ans: (i) Fines: Deductions can be made for fines imposed on employees for misconduct as per the
terms of employment or the rules of the establishment.
(ii) Deductions for Absence from Duty: Employers can deduct wages for the period an employee is
absent from duty without an acceptable reason. However, this deduction cannot exceed an amount
equivalent to the wages payable for a period of 12 working hours.

(iii) Deductions for Damage or Loss: Deductions can be made for damage to or loss of goods
expressly entrusted to the employee's custody, if the damage or loss is directly attributable to the
employee's negligence or default.

(iv) Income Tax: Deductions towards income tax payable by the employee.

(v) Contributions to Provident Fund or Other Funds: Deductions can be made towards
contributions to Provident Fund or any other fund to which the employee has agreed in writing.

(vi) Subscription to Cooperative Societies and Savings Funds: Deductions can be made towards
subscription to cooperative societies or savings funds, approved by the government.

(vii) Recovery of Advances or Loans: Deductions can be made for recovery of advances or loans
granted to the employee. However, the total deduction in any one wage period should not exceed
75% of the wages earned by the employee during that period.

(viii) House Accommodation: Where the employer provides house accommodation, deductions can
be made towards rent of such accommodation as agreed upon.

(ix) Utility Services: Deductions can be made towards charges for electricity, water, or any other
amenity provided by the employer.

Q10. Features of NPS.

Ans: The National Pension System (NPS) is a voluntary, long-term retirement savings scheme
initiated by the Government of India. It offers a range of features and benefits to its subscribers.
Here are some of the key features of the NPS:

(i) Voluntary Contribution: NPS is open to all Indian citizens between the ages of 18 and 60,
including NRIs (Non-Resident Indians), on a voluntary basis. Subscribers can join the scheme either
through their employers (Corporate sector, Government sector) or individually.

(ii) Tiered Structure: NPS operates through two tiers:

Tier-I: This is the primary retirement account which is mandatory and has restrictions on withdrawals
until retirement.

Tier-II: An optional account that allows for withdrawals as per the subscriber's needs. However, it
requires an active Tier-I account.

(iii) Choice of Investment Options: NPS offers two investment options to subscribers:

Active Choice: Subscribers can allocate their contributions across four asset classes - Equity,
Corporate Bonds, Government Securities, and Alternative Investments.
Auto Choice: Investments are managed as per the age of the subscriber, with a higher equity
allocation at a younger age and gradually shifting towards safer options as retirement approaches.

(iv) Portability: NPS is portable across jobs and locations, allowing subscribers to continue their
investments regardless of changes in employment or residence.

(v) Tax Benefits: Contributions made towards NPS are eligible for tax benefits under Section 80C of
the Income Tax Act, subject to a maximum limit. Additionally, contributions up to 10% of the salary
(Basic + DA) for salaried individuals and 20% of gross income for self-employed individuals are
eligible for an additional deduction under Section 80CCD(1B).

(vi) Regulated by PFRDA: The Pension Fund Regulatory and Development Authority (PFRDA)
regulates and supervises the NPS, ensuring transparency, efficiency, and fairness in its operations.

(vii) Choice of Pension Fund Managers (PFMs): Subscribers have the flexibility to choose from
various Pension Fund Managers (PFMs) who manage their investments, providing options for
different investment strategies and performance track records.

(viii) Annuity Options: At the time of retirement, subscribers can use the accumulated corpus from
their NPS account to purchase an annuity from any of the IRDAI-regulated insurance companies,
providing a regular pension income.

(ix) Online Access and Monitoring: Subscribers can access their NPS accounts online through the
NPS website or mobile app, allowing them to monitor their contributions, investment performance,
and account statements conveniently.

(x) Exit and Withdrawal Options: Upon retirement or reaching the age of 60, subscribers can
withdraw a portion of their accumulated corpus as a lump sum, while the remaining portion must be
used to purchase an annuity to provide a regular pension income. Additionally, partial withdrawals
are allowed for specific purposes such as higher education, marriage, or medical treatment, subject
to certain conditions.

These features collectively make NPS an attractive retirement savings option, offering
flexibility, tax benefits, and potential for long-term wealth accumulation.

Q11. Conditions of subscription of GPF.

Ans: (i) Eligibility: Government employees, including those in civil services, defense services, and
certain autonomous bodies, are eligible to subscribe to the GPF.

(ii) Voluntary Subscription: Generally, subscription to the GPF is voluntary for government
employees, though there might be certain rules mandating it for specific categories of employees.

(iii) Rate of Contribution: Employees contribute a certain percentage of their salary towards the
GPF, typically ranging from 6% to 12%. The exact percentage may vary depending on government
regulations and employee choice.
(iv) Matching Contribution: In some cases, the government might also make a matching
contribution to the employee's GPF account.

(v) Withdrawal Conditions: Withdrawal from the GPF is usually allowed for specific purposes such
as education, medical treatment, purchase/construction of house, marriage, etc. There might be
restrictions on the maximum amount that can be withdrawn and the frequency of withdrawals.

(vi) Interest Rate: The GPF balance earns interest at a rate determined by the government. This rate
is subject to periodic revisions.

(vii) Nomination: Employees are required to nominate a beneficiary who would receive the GPF
balance in case of the employee's demise.

(viii) Account Maintenance: Each employee has a separate GPF account maintained by the
respective government department/office.

(ix) Transferability: In case of a change in employment within the government sector, the GPF
account can be transferred from one department/office to another.

(x) Loan Facility: Some GPF schemes may allow employees to avail of loans against their GPF
balance under certain conditions.

(xi) Final Withdrawal: Employees can make a final withdrawal from the GPF upon retirement,
resignation, or at the end of their service tenure.

Q12. Who are power traders in context of APDCL.

Ans: In the context of APDCL (Assam Power Distribution Company Limited), power traders refer to
entities or companies involved in the buying and selling of electricity in the open market. These
traders typically operate in the electricity market, purchasing power from various sources such as
generators, power producers, or other traders, and selling it to distribution companies like APDCL.

Power traders play a crucial role in the electricity market by facilitating transactions between
different entities, optimizing the utilization of resources, and helping in the efficient distribution of
electricity. They may also engage in activities such as hedging, risk management, and portfolio
optimization to ensure a stable supply of electricity at competitive prices.

In the context of APDCL, power traders could include both private companies and state-
owned entities that participate in electricity trading activities within the region served by APDCL.
These traders may operate under regulatory frameworks established by relevant authorities to
ensure fair and transparent electricity markets.