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Tuesday, February 23, 2010

Budget 2010: What the FM is likely to do!

Despite the fact that the annual budgetary exercise has slowly been losing its significance, Budget 2010-11 is seen to be extremely significant.

Finance Minister Pranab Mukherjee has his hands full. He faces a tough challenge as he has to try and present a balanced Budget; one that will appease the aam aadmi and also not hamper growth.

And some of the reasons why the Budget 2010 will be extremely significant the impending are:

The Direct Taxes Code might come into force from the next fiscal year. The government is struggling to keep inflation and food price rise under control. The fiscal deficit is already at a distressing high. So should he push for fiscal consolidation or go in for big social sector and other spending? Should he keep subsidies intact or should he bite the bullet and go in for tough reforms? Should he push for faster growth without upsetting the common man, while still removing the excess liquidity in the system? Should he continue with or withdraw the economic stimulus packages? Or should he do it only partially?

So what is it that Finance Minister Pranab Mukherjee is likely to do? Well, here are some views culled from various new agencies, newspapers and experts on what the February 26 Union Budget for 2010-11 might have in store for you.

Income tax rates to be lowered?

All individuals want and expect reduction in personal taxes. But views on whether this will happen or not are varied. Some experts believe there might be no changes in personal income tax rates, while others seem feel that the finance minister may increase the slabs for personal income tax. The current slab of Rs 1.6 lakh (Rs 160,000) for taxable income may be increase to Rs 2.5 lakh (Rs 250,000) for men. There will be suitable increments to women and senior citizens. Income above this slab is taxed at 10% till the next slab.

The second slab may be increase to Rs 10 lakh (Rs 1 million) from the current Rs 3 lakh (Rs 300,000) for the taxation at 20%.

The third slab is expected to be raised to Rs 25 lakh (Rs 2.5 million) for the 30% tax rate. This is from an existing slab of Rs 5 lakh (Rs 500,000). The highest slab is expected to occur at Rs 50 lakh (Rs 5 million). This is an increase from the current slab of Rs 10 lakh.

Some economists feel that the deduction limit of Rs 100,000 under section 80C may be increased to Rs 250,000, to encourage the common man to resort to savings.

A Times of India report said that the government might also increase the exemption limit for reimbursement against medical and travel expenses. Currently, reimbursement of medical expenses up to Rs 15,000 is tax-free: this might be raised to around Rs 25,000. Transport allowance is tax-free up to Rs 800 a month: this could be raised to Rs.2,500 per month.

Another conjecture is that the interest paid on home loans which is currently not taxed up to Rs 150,000 might be increased to Rs 250,000, in another bid to keep the common man happy. However, many economists say that this is unlikely to happen.

The finance minister might reduce wealth tax to 0.25 per cent as suggested in the New Direct Taxes Code from the current 1 per cent, said an Economic Times report.

Corporate Tax might be reduced

Reports indicate that corporate tax rate might be lowered to 30 per cent in the Budget 2010-11, as a precursor to the New Direct Taxes Code that has recommended cutting it down to 25 per cent.

The stock markets too will be closely following the FM's proposals to see if he cuts corporate tax or removes corporate surcharge thereby helping boost corporate profitability. This move might prove to be a big booster dose for companies and the stock markets.

Fiscal consolidation; economic stimulus rollback

Mot people believe that with the economy back on an even keel and almost out of a slowdown, the indirect tax rate may be recalibrated to the pre-stimulus levels. Thus, the finance minister is seen as rolling back the stimulus.

Many economists however believe that a rollback of the economic stimulus or increase in tax rates might have a bad effect on the economy and might push it back into the quagmire of recession.

Chances are that the finance minister will partially roll back the stimulus packages leading to a rise in excise duties.

The government may take the first step towards fiscal consolidation by partially rolling back tax cuts given to the industry last year. The service tax rate may be restored to 12 per cent while excise duty could be increased marginally.

A first step towards withdrawing the post-crisis fiscal stimulus may be taken in the Union Budget for 2010-11, with an increase in the Cenvat rate for excise duty by 2 percentage points.

The government is likely to extend the 2 per cent interest subsidy given to exporters on rupee export credit from March 31 to December 2010.

The packages include assured employment programmes, infrastructure programmes related to roads, easy access to loans for companies, less interest rate on loans by reducing the CRR and SLR.

It is expected that the same support will continue this year too. One of the key things that can go against the continued stimulus is the very high inflation.

Food inflation

With food prices shooting through the roof and crippling the aam aadmi, the finance minister is under huge pressure to take steps to control runaway inflation in tandem with the Reserve Bank of India.

The opposition parties too are stalling the business of Parliament over the issue of price rise.

Currently, food inflation is dangerously close to 20 per cent. This has left a huge hole in the common man's pocket and a big dent in the government's image.

Thus reining in high inflation will be a major challenge for the finance minister.

The budget is likely to implement the Congress' poll promise of a Food Security Bill, apart from increasing funds for schemes under the Mahatma Gandhi National Rural Employment Guarantee Act.

Service Tax may rise

The finance minister might increase service tax rate to 12 per cent from 10 per cent. This will lead to a rise in the cost of over 109 services, such as beauty salons, health and fitness clubs and rent-a-car services, said a Hindustan Times report.

The government is aiming at service tax collections to the tune of Rs 75,000 crore (Rs 750 billion) for 2010-11.

Increase in Gratuity Limit

Already given the go ahead by a group of Ministers, the gratuity limit at the time of retirement may be increased to Rs 10 lakh from the current Rs 3.5 lakh (Rs 350,000). This is definitely less than the 'No Upper Limit', requested by the salaried class. But the increase in limit is much better than the archaic Rs 3.5 lakh.

This is definitely a blessing for people who are retiring. Many a times, with the higher income that the Central and State government employees enjoy, at the time of retirement, people are not getting the full amount that has accrued in their gratuity account.

Increase in self assessment slab

The self assessment slab is currently at Rs 40 lakh (Rs 4 million) for professionals and business people. This slab may be increased to Rs 1 crore (Rs 10 million). This will help to reduce the accounting burden for the self employed and professionals.

PAN card linkage

The PAN (Personal Assessment Number) card is currently the prime card required for any financial transaction.

However, there are a number of missing links in the implementation. For example, bank deposits in different banks (private and public sector banks and cooperative banks) are not linked. This has been used (misused) by tax payers and tax evaders by having a number of accounts in different banks to avoid tax on interest.

The same is happening with mutual funds with different folio numbers to avoid getting a KYC (Know Your Client) certification.

Making a PAN card mandatory has not been enough. The accounts also need to be integrated based on the PAN card.

The forthcoming budget may make this implementation mandatory. More than any other change in the income tax, this will be the biggest change, if implemented, as it is a disruptive change compared to the other marginal changes.

Double tax avoidance treaties

The Budget is expected to lay down a plan to plug loopholes in the double tax avoidance treaties, which cost the Indian exchequer billions in tax revenues, said Business Standard.

Jobs

Job creation schemes might be taken up on a bigger scale, although reports indicate that the finance minister might not increase the budget allocation to the NREGA substantially.

Defence

The defence ministry is expecting a 15-20 percent increase in it budget allocation for the next fiscal due to rise in expenditure on its modernisation drive and commitments following pay review, according to a report in The Financial Express.

Emphasis on social sector schemes

Social sector schemes -- including those related to health, education, infrastructure and development projects -- are likely to figure prominently in the finance minister's Budget proposals this year.

However, with the fiscal deficit getting out of control, the FM will have to a tightrope walk to strike a balance between controlling expenditure and providing funds for the social sector.

Divestment

Last year's budget was a major indicator of the government's view on divestment. With the Left parties no longer holding the government to ransom, it is likely that the finance minister might adopt an aggressive line on divestment of public sector units.

Agriculture reforms

Like the year before last when the then finance minister P Chidambaram waived off farmers' loans giving a major boost to the agriculture sector, this time too the government is keen to help the sector grow further.

There are indications that the finance minister might partially give in to the farmers' demands and provide some subsidies, although this might not be a move that is sustainable or based on economic logic.

GST implementation

This is a much talked-about and often-postponed implementation. There are a number of benefits from the implementation of GST (Goods and Services Tax). The major benefit for the common man is the potential reduction in prices of products. The reason being the tax burden in the form of multiples levels of taxes on products and services will come down.

The government will also benefit because more companies and services can be brought under the tax net. So the government will get lesser tax from more number of people leading to higher income and greater compliance. It is hoped that this budget will give a clear date for the implementation of GST.

Income tax reforms objectives & progress

Overall the reforms related to income tax are to simplify the process of paying/collecting taxes, to expand the tax payers base so that the burden of tax is reduced and spread over many.

The direction taken by the authorities is on the right track however the speed till now is slow. The expectation from the forthcoming budget based on the pre-budget discussion is that there may be a few block buster changes.

Reforms in foreign investment

Reforms in the form of greater foreign investment in the financial services industry is expected from this budget -- insurance, for example. It is also expected that foreign investment in print media would be allowed at least to a small extent.

It is expected that foreign investment will also be allowed in the education sector. This will help to bring quality international education at affordable costs in India itself.

Safety of the student is another major benefit considering the physical pains that our students are undergoing in Australia.

For the economy, this can be a double benefit for our foreign exchange: one, investment will come in; two, outflow of foreign exchange due to students going abroad for higher education will come down.

Monday, February 22, 2010

LTC when both husband and wife are Government servants

Leave Travel Concession: when both husband and wife are Government servants and are residing together. reg.
According to the definition of family as given under rule 4, which is applicable, in travel inter alia, for the purpose of admissibility of LTC, the family of a Government servant includes wife or husband, as the case may be, residing with the Government servant and children residing with and wholly dependent upon the Govt. servant. In addition, it includes the parents, sisters and minor brothers, if residing with and wholly dependent upon the Government servant.
According to the existing position where both husband and wife are Govt. servants and are residing together, they constitute one family unit for the purpose of LTC and only one of them can claim this concession and the other spouse travels as a member of his/her family.
In such a case, the Govt. servants are required to make a joint declaration of a common hometown, which can be the hometown of either of the spouses or a third place. Therefore, the spouse who avails the LTC as member of family of the other could not claim the benefit separately for his/her own parents or dependent minor brothers and sisters even if they were residing with him/her.
On the other hand, where a couple, both being Govt. servants, are residing separately can claim the benefit of LTC individually for their dependent parents, minor brothers and sisters and also declare two separate places as their respective hometowns.
Therefore, the husband and wife when both are Govt. employees and are staying together suffer from certain disadvantages inasmuch as they have to declare common hometown and only one of them can claim the benefit of LTC.
The matter has been considered in consultation with Ministry of Finance (Department of Expenditure) and it has been decided that where husband and wife both are Govt. servants, they could, at their option, choose to declare separate hometown and both of them may claim the concession separately under the normal provisions of CCS (LTC) Rules in respect of the members of their respective families subject to the condition that if husband or wife avails the facility as a member of the family of the other, he or she will not be entitled for claiming the concession for self independently. Similarly, the children shall be eligible for the benefit in one particular block as members of the family of one of the parents only.
All other conditions for admissibility of the LTC shall continue to be applicable as per normal provisions of the scheme. The above decision will be applicable to the journeys performed for availing the LTC against the block years 1990-91 onwards.

Sunday, February 21, 2010

State Bank of India on hiring spree, to recruit 20k

The country's largest public sector lender State Bank of India is likely to carry on its hiring spree to the next fiscal as it plans to recruit around 15,000 -20,000 people in FY11, its chairman O P Bhatt said on Saturday.
"We have recruited 25,000 employees this year. Next year also, it would be somewhere around this number...we may recruit around 15,000-20,000 people," O P Bhatt said on the sidelines of an event here.
In 2008-09, the bank recruited 27,000 staff across various verticals, Bhatt said.
Earlier this month, Bhatt had said that the bank plans to induct around 2,000 probationary officers for rural business in FY10. In addition, the bank would hire 2,500 probationary officers.
SBI is in the process of inducting 11,000 clerks for marketing, banking and advisory services and 481 officers for marketing and recovery (rural) and technical officers (farm sector).
After launching an e-learning package of Indian Institute of Banking and Finance here, Bhatt highlighted the need to attract more quality manpower to the banking industry.
He also said that the staff should understand the nature of financial products such as complex derivative products, the mis-selling of which had contributed significantly to the recent financial crisis, prior to selling these to the client.

Wednesday, February 17, 2010

Will Budget 2010 have respite for the 'Aam Aadmi'?

The Aam Aadmi's expectations from Budget 2010 are high given the ever rising inflation and wholesale price index (WPI). An appropriate increase in the income tax slab could probably cushion the impact of the increased inflation and WPI and could bring about some relief. An enhancement in the basic exemption limit to a realistic level would at least bring a small smile on the face of the common man!
As of today, self-employed people are better off than salaried employees as they are entitled to the deduction for expenditure incurred to earn the income, whereas there are no prescribed deductions available for salaried employees. Therefore, it is expected that this budget would at least provide for a standard deduction to cover certain expenditure.
Given the current scenario; difficulties increase for the employed class people due to double taxation in case of contribution to the retirement pension schemes. Employees would be paying taxes not only at the time of contribution (if contribution is in excess of Rs 100,000) to superannuation fund (which is approved by the income tax authorities), but also upon retirement. Hence, it would be prudent to tax such benefit only when they are enjoyed by the employee i.e. on retirement when pensions are received.
Further, certain exemptions are provided to boost social objectives or employee welfare or to meet the specific needs of the working group. However, in the present economic environment, the age old exemptions limits are inadequate and need a thorough make over.
Some of such exemption limits, which are historical and should be enhanced to a more practical limit keeping in mind the current economic environment and the inflationary pressure are listed below:
• Exemption limit of Rs 100 per month for education allowance fixed in 1997; Exemption limit of Rs 50 for meal provided was introduced in 2001 i.e. around 8 years ago and no revision has been done; Exemption limit of Rs 800 per month for Transport allowance was fixed in 2001;
• Exemption limit of Rs 15,000 p.a. for domestic medical reimbursement;
• Exemption limit for Gratuity (payable on retirement) was fixed to Rs 350,000 in 1997, more than a  decade  ago.
Similarly, to encourage the saving and for channeling savings to the prescribed sector, deduction/relief from tax is given to the individual taxpayer on making investment in specified securities. Current deduction available from tax is restricted to Rs  100,000.  Such limit should be enhanced to Rs 300,000 as recommended in the Direct tax code.
Benefits arising to an employee on account of the employee stock option plan (ESOP) get taxed on allotment of the security without any realisation of cash rendering ESOP unattractive. In the past, Government has given the benefit of the qualified plan, which allowed employees to pay tax on realisation of cash. Such beneficial tax provisions should be restored.
Income Tax provisions should be more versatile to the needs of the expatriate employees and global compensation.  Most of the tax provisions tend to ignore global compensation and the matter is usually left to litigation that gets resolved only after several yeaRs  Some examples to consider are as follows:
• The Income tax act does not contain any provision for the Hypothetical tax deducted by the employer resulting into overall reduction in entitlement to the compensation. Therefore, deduction on account of the hypothetical taxes is allowed only when it is appealed before the higher authorities. This increases the overall cost of the carrying on international business for foreign as well as Indian multinational companies;
• The notional taxable value of interest on loans (interest free or at a concessional rate of interest) taken by the employee from the employer is imputed based on interest rate of the state bank of India. Even in case where loan taken in foreign country at market rate from the employer, taxable value will be imputed based on SBI rate rather than benchmarking with market rates of interest of such foreign country. In order to remove such an anomaly suitable amendments needs to be incorporated;
• Exemption for the Leave travel assistance provided by the employer covers only travel fare in India while the employee is on vacation. It does not cover a situation where an employee if deputed abroad would find it impractical to take a vacation for travelling in India to avail the exemption. Therefore this exemption should also be extended to include foreign travel.
Similarly, deduction for interest on loan for self occupied house is currently restricted to Rs 150,000. Such limit should be enhanced to the appropriate level as housing loan has become more expensive making it practically impossible for the middle class group to acquire immovable property.
The above suggestions would be too insignificant to adversely affect the overall collections of the Government, but would definitely result in a perceptible relief to the huge middle class population in the country, which has been a significant contributor to the growth of the Indian economy over the past few years.

Monday, February 15, 2010

Direct tax: no great expectations

It is that time of the year when we gear up and submit suggestions to the finance minister for his consideration in the upcoming budget. From the direct tax perspective, there are no high expectations from the budget this year because of the much-awaited Direct Tax Code proposed to be effective from April 1, 2011. The current tax regime is just a stopgap arrangement for this year and, thus, all amendments in the present law will be short-lived.

From the direct tax perspective, a few aspects that the common man may look forward in the upcoming budget are:

Rationalisation of the income tax exemption limit and tax slabs: In India, the income level on which tax at a maximum marginal rate is levied, is far lower compared with a large number of developing and emerging economies. On the other hand, the prices of essential commodities are skyrocketing. Therefore, relief must be provided by attempting to reduce the prices and also by ensuring more disposable income to counter the problem of inflation. The most impeccable solution would be to enhance the basic exemption limit and the income slabs as shown in Table 1.

Increase in the conveyance allowance limit for employees: At present, conveyance allowance is exempt up to Rs 800 per month. With the increase in fuel prices, this threshold should be increased in the range of Rs 3,000-3,500. Similarly, there is a need to rationalise the exemption limit for children education allowance, hostel expenditure allowances, etc.

Increase in gratuity limit: Under the existing law, gratuity received by a non central government employee to the extent of Rs 3.5 lakh is tax free. For central government employees, the exemption is Rs 10 lakh. There have been various representations to the government to increase the exemption for gratuity to Rs 10 lakh for all.

Enhance the quantum of deduction under section 80C: The government should give more emphasis on savings to secure life after retirement and such impetus can be given by increasing the quantum of deduction to Rs 3 lakh from a meagre Rs 1 lakh.

Enhance the exemption limit on medical benefits: Exemption of expenses incurred on medical treatment and reimbursed by employer should be raised from Rs 15,000 yearly to at least Rs 30,000 yearly.

Discrepancy in the age for senior citizens: The discrepancy in the age for senior citizens specified under the income-tax legislation (65 years) and other government departments (60 years) should be removed. Such a measure would help to avoid hardships on people retiring at 60 but paying high taxes on pension till the age of 65.

The common man’s wish list is endless and the irony is that all of these have now become a necessity. The finance minister has a tough job as he has to consider the prospects and consequences of each amendment and then take a decision that suits the larger national interest. However, it won’t be apt to expect that all these will find a mention in this year’s budget. Even if some do make their way, it will be a great relief!

Sunday, February 7, 2010

INCOME TAX – FREQUENTLY ASKED QUESTIONS

INCOME TAX – QUESTIONS AND ANSWERS :-
What is an Assessment Year?
It is the twelve-month period 1st April to 31st March immediately following the previous year [refer answer-4]. In the Assessment year a person files his return for the income earned in the previous year. For example for FY:2006-07 the AY is 2007-08.
What does the Income Tax Department consider as income?
The word Income has a very broad and inclusive meaning. In case of a salaried person, all that is received from an employer in cash, kind or as a facility is considered as income. For a businessman, his net profits will constitute income. Income may also flow from investments in the form of Interest, Dividend, and Commission etc. Infect the Income Tax Act does not differentiate between legal and illegal income for purpose of taxation. Under the Act, all incomes earned by persons are classified into 5 different heads, such as:
Income from Salary
Income from House property
Income from Business or Profession
Income from capital gains
Income from other sources
My children living abroad send me Rs.20000/- per month for my maintenance. Would this be considered as my income?
No.
What is a return of income?
It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income is communicated to the Income tax department after the end of the Financial year. Different forms are prescribed for filing of returns for different Status and Nature of income.
From where can I get a return form?
The Public Relation Officer [PRO] can be contacted for this purpose. The form can also be downloaded from the site http://www.incometaxindia.gov.in/.
How can I know which form is applicable for my income?
You should choose a return form according to your status and nature of income from the following:
ITR1 – For Individuals having Income from Salary/ Pension/ family pension & Interest
ITR2 – For Individuals and HUFs not having Income from Business or Profession
ITR3 – For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
ITR4 – For individuals & HUFs having income from a proprietary business or profession
ITR5 – For firms, AOPs and BOIs
ITR6 – For Companies other than companies claiming exemption under section 11
ITR7 – For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D)
ITR8 – Return for Fringe Benefits
ITRV – Where the data of the Return of Income/Fringe Benefits in Form ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-8 transmitted electronically without digital signature
If I fail to furnish my return within the due date of filing, will I be fined or penalized?
Yes. This may take the form of interest if the return is not filed before the end of the assessment year. If the return is not filed even after the end of the assessment year, penalty may also be levied.
If I have paid excess tax how and when will it be refunded?
The excess tax can be claimed as refund by filing your income tax return. It will be refunded by issue of cheque or by crediting to your bank account. The department has been making efforts to settle refund claims within four months from the month of filing return.
There are various deductions that have not been reflected in the Form 16 issued by my employer. Can I claim them in my return
Yes.
What is considered as Salary income?
Whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as Salary.
What are allowances? Are all allowances taxable?
Allowances are fixed amounts, apart from salary, which are paid by an employer for the purpose of meeting some particular requirements of the employee. There are generally three types of allowances for the purpose of income tax- taxable, fully exempted and partially exempted.
My employer reimburses all my expenses on grocery and children’s education. Would this be considered as income?
Yes. These are in the nature of perquisite.
Even if no taxes have been deducted from salary, is there any need for my employer to issue Form-16 to me?
Form-16 is a certificate of TDS and in your case it will not apply. However your employer must issue a salary statement.
If I am receiving my pension through a bank who will issue Form-16 or pension statement to me- the bank or my former employer?
The bank.
Are retirement benefits such as PF and Gratuity taxable?
No. They are exempt subject to conditions and limits laid down in the Income Tax Act.
Can my employer consider relief u/s 89(1) for the purposes of calculating my tax liability?
Yes.
Is leave encashment taxable as salary?
It is taxable if received while in service. Received as retirement benefit, however it is exempt subject to certain conditions.
What is TDS?
TDS means Tax Deducted at Source. It is the amount withheld from payments of various kinds such as salary, contract payment, commission etc. This withheld amount can be adjusted against your tax due.
Some demand has been raised by my Assessing officer after assessment. Can I pay this demand in installments or seek time till my appeal is settled?
Yes. You may approach your Assessing officer within 30 days of receipt of demand notice for installments or stay or seek time for payment. However you are liable to pay interest for delay in payment of demanded tax.

Saturday, February 6, 2010

Muslim Govt employee’s second marriage illegal: Supreme Court

A ruling by the Supreme Court, upholding as illegal the second marriage by a Muslim employee of Rajasthan Government without divorcing first wife, has kicked off a major controversy. Muslim clerics and leaders say this judgement would jeopardise the right of Muslims to have more than one marriage under the Muslim Personal Law.

A division bench of the Supreme Court, comprising Justice VS Sirpurkar and Justice Aftab Alam, on January 25 dismissed the petition of Liyakat Ali, a former constable in the Rajasthan Police, challenging the judgement of the Rajasthan High Court, which said that under the Rajasthan Civil Services (conduct) Rules 1971 no Government employee, irrespective of his or her religion, is allowed to marry second time without the permission from the Government.

The State Government had terminated the services of Ali about 23 years ago on the ground that he had married second time without divorcing his first wife and without taking prior permission.

Ali has been contesting in various courts since 1986 that under the Muslim Personal Law, he is allowed to marry second time without taking the permission of the Government. He also maintained that he had divorced his first wife before his second marriage.

On the instructions of the lower courts, his case was investigated. The probe concluded that Ali got married to Maksuda Khatun without divorcing Farida Khatun, his first wife.

Mohammad Salim Engineer, leader of the Rajasthan Muslim Forum, says under the Muslim Personal Law, community has got certain rights. This law allows a Muslim to have second wife and this should be accepted by the Government. He wants that the State Government should amend its service rules in this regard.

Mujahid Naqvi of the Milli Council says the judgement is a direct interference in the religious rights of the Muslim community.

Manish Bhandari, who argued the case on behalf of the State Government, is of the opinion that relevant clauses of the service rules give more stress on disciplining its employees rather than interfering in any of their personal laws.

Tuesday, February 2, 2010

SSC for single application for nearly 30 posts, expects 30 lakh applicants for 20,000 jobs

The Staff Selection Commission (SSC) has planned a three-tier selection process based on a single application for nearly 30 posts, where separate examinations used to be conducted till now.

On the recommendation of the Second Administration Commission headed by Veerappa Moily, the proposal to conduct a single examination based on a single application was approved by the Department of Personnel and Training last month, Commission chairman NK Raghupathy told reporters here today.

The examination would be based on objective type multiple type question. The Commission is also putting in place a process for online submission of applications though the paper-based offline application would be continued this time, he said. There are also plans to shift to online-testing platform in three years.

As part of the new scheme, candidates will be advised to give option, in order of priority, for various group of posts included in the examination.

The new pattern of examination will reduce the period of recruitment process from two years to one year, he said, adding the introduction of objective multiple choice questions at the tier II level will do away with the manual checking of the answer scripts as the answers would be evaluated through a machine.

The new process would be evaluated after a period of two years based on feedback from the client departments of the Government of India, after which, if required, necessary changes would be effected, he said.

The Commission plans to move to the online testing platform from 2013 onwards, he said, adding the first online testing would be conducted for posts where the applicants were nearly 10,000 to 20,000.

The Commission would fill up nearly 15,000 posts this year and nearly 20-25 lakh candidates were expected to apply for these posts, he said.

Various departments of the Central government had started filling the vacant positions, which had resulted in a significant increase in vacancies from 6,028 positions last year to over 15,000 vacancies this year, he said. The Commission would also recruit 10,000 constables for BSF this year, he added.

To a query on alleged skewed representation from various regions of the country, Raghupathy said percentage wise, the representation was almost equal. He said the SSC had done away with zone-wise selection process after the 1996 Supreme Court judgment and was conducting selections on all-India basis.

However, the Commission had sent a proposal for increased representation to locals in various posts to the government and the government was expected to take a decision on the issue this year, he said.

Asked if the Commission would recruit personnel on behalf of the Railway Board, Raghupathy said, 'if the Railway Board wants us to undertake recruitment, they are welcome.'

SSC makes recruitment to Group B posts in the various ministries/ departments of the Central Government and non-technical Group C posts in various ministries/departments, except those posts which are specifically exempt from the purview of the Commission.