CPAO : Pension Related Frequently Asked Questions & Answers

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Name of the Organisation : Central Pension Accounting Office (
Type of Facility : FAQs Related to Pension

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1. Which rules Govern Pensions ?
Central Civil Services Pension Rules.

2. Who is the Pension Sanctioning Authority ?
Head of Office in the Ministry/Deptt./Office where a Government servant last served is the pension sanctioning authority.

3. What should a Government servant do to claim his pension ?
The Head of Office is required undertake the work of preparation of pension papers in form No. 7 of Pension Rules two years before the date on which a Government is due to retire on superannuation. Eight months prior to the retirement date, a Government servant is required to furnish certain information (e.g. joint photo with wife/husband, family details, name of the branch of the authorised bank through which he desires to draw his pension etc.) to his Head of Office in the prescribed form No. 5. After complying with the requirements of CCS Pension Rules 59 & 60, the Head of Office has to forward to the Pay & Accounts Officer form 5 and form 7 duly completed with a covering letter in form 8 alongwith service book of the Government servant duly completed up-to-date and any other documents relied upon for the verification of service, not later than six months before the date of Retirement of Government Servant

4. Who is to authorize the pension ?
On receipt of pension papers from Head of Office, the Pay & Accounts Officer concerned will, after applying requisite checks, assess the amount of pension and issue the pension payment order (both halves of Pension Payment Order, i.e. disburser’s portion and pensioner’s portion) not later than one month in advance of the date of retirement of the Government servant with forwarding authority letter, duly ink-signed and embossed, to Central Pension Accounting Office which inturn will generate a Special Seal Authority on the basis of details given in the Pension Payment Order. the authority letter of the Pay & Accounts Officer and both halves of PPO with Special Seal Authority shall be forwarded to the concerned link branch of the authorised Bank in the State/Union Territory, which after keeping the details in the index register will transmit the documents received from the C.P.A.O. to its paying branch opted for by the pensioner for making payment thereof.

5. What is required in case the pension has not been fixed correctly ?
The Pay & Accounts Officer while issuing the pension authorization shall forward one copy of the pension calculation sheet (out of three received by him from the Head of Office) as certified by the Head of Office and countersigned by him (Pay & Accounts Officer) to the pensioner alongwith the intimation of his having sent the pension payment authority/PPO to the CPAO. In case it is found from the pension calculation sheet that pension has been fixed incorrectly, the matter may be taken-up with the Head of Office, PAO concerned who, if necessary, will issue an amendment authority letter to Central Pension Accounting Office for onward transmission to the paying branch (through its link branch) to carry out necessary amendments in both halves of PPO.

6.Whether retirement gratuity, death gratuity can be paid by PAO/CPAO ?
No. The amount of retirement/death gratuity as determined by the PAO shall be intimated to the Head of Office who will draw and disburse the amount to the retired Government servant or to the nominee/family as the case may be.

7. Is the Dearness Relief payable on original basic pension or on reduced pension after commutation ?
The Dearness Relief is payable on original basic pension before commutation.

8. Is any authorization from PAO/CPAO required for payment of dearness relief at increase rates to pensioners/family pensioners ?
No. Whenever any additional relief on pension/family pension is sanctioned by Government an intimation to this effect is sent by the Ministry of Personnel, Public Grievances and Pensions (Deptt. of Pension and Pensioners’ Welfare) to the authorised representative of each nominated Public Sector Bank. Each link branch will be responsible for ensuring that copies of the orders sanctioning additional relief have actually been received by their paying branches and payment of additional relief at the revised rates to the pensioners has been commenced by them without any undue delay. Whenever there is change in the rates of dearness relief on pension, paying branch will keep a note of rates alongwith date from which relief would take effect in disburser’s portion and the pensioner’s half of the PPO under attestation by the branch Manager or in-charge before commencing payment of relief at the revised rates and/or payment of arrears, if any, due to the pensioner on this account.

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9. Is there any restriction on commutation of pension ?
Yes. No Government servant against whom departmental or judicial proceedings as referred to in Rule 9 of the Pension Rules, have been instituted before the date of his retirement or the pensioner against whom such proceedings are instituted after the date of retirement should be eligible to commute a fraction of his provisional pension authorised under Rule 69 of the Pension Rules or the pension, as the case may be, during the pendency of such proceedings.

10. Is there any limit on commutation of pension ? A Government servant shall be entitled to commute for a lumpsum payment upto 40 per cent of his pension. 11. What will be the effective date of reduced pension if, a) The applicant is drawing pension from PAO? b) The applicant is drawing pension from a branch of an authorised bank ? c) A Government servant who retired on superannuation and applied for commutation in form 1-A of CCS(Commutation of Pension)Rules upto the date of retirement and commutation paid through Head of Office within the first month of retirement ? d) In case of commutation of provisional pension and retrospective revision of final pension?
a) The reduction in the amount of pension on account of the commutation shall be operative from the date of receipt of the commuted value of pension or at the end of three months after issue of authority by the PAO for the payment of commuted value of pension, whichever is earlier. b) The reduction in the amount of pension on account of commutation shall be operative from the date on which the commuted value of pension is credited by the bank to the applicant’s account to which pension is being credited. c) The reduction in the amount of pension on account of commutation shall be operative from its inception. The commuted value is paid in two stages as such the reduction in the amount of pension shall be made from the respective dates of the payment as per (a) or (b) above, as the case may be.

12. How is the period of 15 years for restoration of commuted portion of pension reckon ?
The 15-year period for restoration may be reckoned from the date of retirement itself in case where the payment of commuted value of pension was/is made during the first month of retirement leading to appropriate reduction on account of commutation in the first pension itself. In all other cases, where the commutation of pension led/leads to a reduction in the second or subsequent month, the 15 year period will be reckoned from the date on which reduction in pension became/becomes effective.

13. Whether the family can be given the benefit of 40 per cent commutation if a pensioner dies before exercising option ?
In view of Governments clarificatory orders, no benefit can be given to the family.

14. Is any authorization for restoration of commuted portion of pension after 15 years required from PAO/CPAO ?
Restoration of commuted portion of pension after 15 years (from the date of crediting of commuted value) or as fixed by the Government from time to time is to be made automatically by bank on receipt of application in prescribed proforma from eligible pensioner. In cases where the date of commutation is not readily available in the PPO, the bank will obtain the information from the concerned PAO who issued the PPO through CPAO before restoring the commuted portion of pension.

15. Whether retirement gratuity/death gratuity , commuted value of pension is taxable ?
Retirement/death gratuity and the lumpsum amount received on account of commutation of pension is not taxable under the Income Tax Act 1962.

16. Is the payment of pension in cash or through a joint account with or without “EITHER” or “SURVIVOR” facility permitted in the Scheme for Payment of Pension to Central Government Civil Pensioners by authorised Banks ?
Payment of pension in cash or through a joint account with or without “EITHER” or ‘SURVIVOR” facility is not permitted in the Scheme.

17. Can a pension account be operated by a holder of Power of Attorney ?
The pension account cannot be allowed to be operated by a holder of Power of Attorney except in the case of the pension accounts of the former Presidents of India or of the spouses of deceased Presidents. However, the facility of allowing cheque books and acceptance of standing instructions for transfer of funds from the account is admissible as per instructions of R.B.I.

18. Can the deduction of Income Tax at source be made from pension payments ?
Yes, the paying branch will be responsible for deduction of Income Tax at source from pension payments in accordance with the rates prescribed from time to time. While deducting such tax from pension payments the paying branch will also allow deduction on account of relief available under Income Tax Act from time to time on production of proper and acceptable evidence of eligible savings by pensioners. The paying branch will also issue the pensioner in April each year a certificate of tax deducted in the form prescribed in the Income Tax Rules.

19. Can the excess payment, if any, credited to the pensioner’s account be recovered by the bank ?
Before commencing payment of pension the paying branch is required to obtain an undertaking in the prescribed form Annexure-XI of the Scheme from the pensioner. On the strength of this undertaking the excess payment, if any, credited to his/her account can be recovered by the paying branch.

20. Can the payment of retirement/death gratuity be made by the bank ?

Unless otherwise specified, payment of death/retirement gratuity is not covered under the Scheme.

There are 4 Comments. Ask your question here.


  1. I am retired from Assam rifles on 01 Nov 2006 after 20 years and 11 months service. This time my basic pay is Rs.6203( basic+DP) now I am getting a pension Rs.8108.

  2. While browsing for the status of the PPO, it is found that the name of the pensioner (me) in the ‘Pensioner’s details’, is wrongly spelt. Will it affect either the drawal of pension or revision of pension or will it be delayed? How to get it corrected?

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