The concept of Notional Increment primarily comes into play when an employee is granted financial upgradation/increment under the provisions of the pay rules. In recent days it is vitally effected on the pensioners who retires on 30 June and 30 December. You must be aware of the Court case to claim Notional incremenet for the pensioners who retires on 30 June or 31 Dec.

Those who are due to earn his/her increment on 01 July or 01 January, and reiring on 30 June or 31 Dec, is deprived even after rendering his qualifying service to earn increment. Govt of India has accepted the orders of Hon’ble Supreme Court in this regard and the appellants of the cases has already been received their benefit who retired on 30 June and 31 Dec from 01.01.2006.

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So many defence and civil pensioners are effected with such decision. However, Govt has not generalized the rules of applicability of notional increment for the retirees who got retired on 30 June and 31 Dec. In this regard letter dated 02 Aug 2023 may kindly be referred. Now all effected personnel should approach the CAT to get such benefit with reference to the orders of Appex Court.

In cases where an employee is promoted or placed in a higher pay level, but the pay fixation results in a situation where the pay in the new pay level is either equal to or less than the pay in the lower pay level, a Notional Increment is calculated and added to the existing pay in the lower pay level for pensionary and other relevant calculations. This means that although the employee’s actual salary remains the same, the calculation of certain benefits and entitlements considers the notional increment for betterment.

Notional Increment also plays a role in pensionary calculations. When a government employee retires, the pension they receive is often based on their last drawn pay. If an employee’s last drawn pay is less than the pay they would have received with the addition of a Notional Increment, it could have a negative impact on their pension. Therefore, in such cases, the Notional Increment helps in ensuring that the pensionary benefits are more aligned with what the employee’s position and service would have entitled them to, if they had received regular increments.

It is important for departments and ministries to accurately understand and implement the concept of Notional Increment to ensure that employees’ rights and benefits are duly protected. Proper documentation and communication regarding the application of Notional Increment during promotions or pay level changes are essential to avoid any confusion or disputes in the future.

In conclusion, the notion of Notional Increment is a crucial factor in the determination of pay fixation and pension calculations in the Central Civil Services and Posts of the Government of India. Its correct application can significantly impact the financial well-being of government employees, especially during critical junctures such as promotions and retirements. Therefore it is expected that Govt should undertakes necessary measures to ensure a clear understanding and consistent implementation of the concept among all concerned personnel who reitres on 30 June and 31 Dec and due for their increment on 01 July and 01 Jan respectively.