Income Tax and AGIF Guide

This guide explains how Income Tax is recovered from your pay, exemptions and rebates you can claim, and the Army Group Insurance Fund (AGIF) subscription and advances. Follow these steps to ensure correct recoveries and maximize tax benefits.

Key Points for Income Tax

Topic	Details
Responsibility	PAO manages Income Tax recovery and TDS e-filing for JCOs/ORs.
Process	PAO checks taxable income, calculates tax annually, and recovers monthly via IRLA.
Recovery Rules	Monthly recovery; revise for pay/allowance changes; include arrears; no cash refunds without IT Officer approval; submit IT 4 after February.
Jurisdiction	File IT return where you serve or reside permanently.
Exemptions	Transport Allowance (Rs 1,600/month), Free Ration.
Rebates	For savings (LIC, PF, etc.) via IRLA or proof; donations via Transcription Sheet.
PAN	Without PAN, 20% tax recovery applies.

Valid Savings for Income Tax Rebates (Old Tax Regime)

Category	Description	Processed Through
IRLA Recoveries	PFSUB (AFPP Fund), AGIS (AGIF), PLI (Premium), HOUSAD (Govt HBA), AGIHBA (AGIF HBA)	Automatic via IRLA
Personnel Savings	LIC, PF, ULIP, CTD, NSC, Mutual Fund, Pension Fund, HBA (LIC/HDFC), CBDT-approved Shares	Submit proof to PAO
Donations	Approved donations (50%/100% rebate)	Submit via Transcription Sheet

Key Points for AGIF Subscription

Topic	Details
Scheme	Mandatory for JCOs/ORs/NCs(E) from 1 January 1976 (Spl. AO 6/S/76).
Recovery	Full-month, in advance, even for mid-month enlistment/discharge.
Additional Recovery	For Infantry MMG Gunners in Army Aviation as aircrew.
Advances	For house building, scooter, motorcycle, moped, PC; recovered monthly via IRLA.
Refunds	Excess recoveries refunded by AGIF Directorate, not PAO.
Restrictions	No duplicate advances from AGIF and government.
Outstanding Loans	Recovered from DCRG, leave encashment, IRLA after government dues; PAO and AGIF reconcile balances.

Checklist for Income Tax and AGIF

Check	Document/Action	Notes
✔️	PAN Number	Provide to PAO to avoid 20% tax recovery.
✔️	Proof of Savings	Submit receipts for LIC, PF, NSC, etc., to PAO.
✔️	Donation Receipts	Submit via Transcription Sheet for rebates.
✔️	IRLA Verification	Check pay slips for correct tax/AGIF recoveries.
✔️	AGIF Advance Application	Apply through unit; no duplicate advances.
✔️	DO Part-II Order	For AGIF advances or taxable allowances.
✔️	Ink-Signed Claim	For rebates or AGIF issues, countersigned by OC/CO.
✔️	Service Book Entry	Confirm tax rebates, AGIF recoveries, advances.

Common Reasons for Issues

Issue
Missing PAN number, leading to 20% tax recovery.
Not submitting proof of savings for rebates.
Incorrect tax calculation due to unreported arrears/allowances.
Missing donation receipts for rebates.
Applying for AGIF and government advances for same purpose.
Missing DO Part-II for AGIF advances.
Excess AGIF recoveries not reported to AGIF Directorate.

Quick Tips

Tip
Provide PAN number to PAO to avoid 20% tax recovery.
Submit proof of savings (LIC, NSC, etc.) to claim rebates.
Verify pay slips monthly for correct tax/AGIF deductions.
Apply for AGIF advances only from one source.
Ensure DO Part-II orders for AGIF advances/allowances.
Keep copies of PAN, savings receipts, donation proofs, pay slips.
Use Transcription Sheet for donation rebates.
Check service book for tax rebates, AGIF recoveries, advances.