Some people think there is no difference between Usual Increment and Annual Increment. But there is many differences between these increments. The annual increment is more beneficial than the usual increment. Some examples are as under:

Main Difference between Usual Increment and Annual Increment

We shall distinguish between Usual and Annual Increment with the examples of pension/gratuity, leave encashment, farewell grant, and TA/DA on retirement.

Pension and Commute/Gratuity

For the calculation of pension and gratuity, there is no difference between the two.

Encashment

For the calculation of encashment, the usual increment is of no use, as it is not calculated/counted for encashment.

Farewell Grant:

On the farewell grant on retirement, the employee gets one Basic Pay in this basic pay we don’t add the usual increment.

TA/DA on Retirement

On TA/DA on retirement, the employee gets one or half basic pay. Again we don’t add the usual increment in that Basic Pay.

AI or UI Which One is More Beneficial?

In the above facts, if the employee would get an Annual Increment it would be the permanent part of his basic pay for all purposes. But the usual increment is only part of basic pay for pension and commute calculation.

When is Annual Increment Due?

• When an employee completes 6 months of regular service in a year, he/she is eligible for the AI of that year.
• If the employee is appointed between 1^st June (After Noon) to 30^th November, he/she is not eligible for the AI of that year.
• If an employee joins his/her service between 1^st Dec to next year 1^st June (Fore Noon), he/she is eligible for the AI of that year as he/she has completed 6 months of service.
• If the employee retires on a certain date but he/she has completed 6, months of service in that year he/she will not get the AI of that year. However, he/she will get a UI instead of an AI. The amount of usual increment and annual increment is the same.

When UI Due?

• When an employee has completed 6 months of regular service in a year and retires during that year, the employee will get a Usual Increment instead of an Annual Increment. The rate of both Increments is the same.
• If the employee retires in a particular year after completing 6 months of regular service but not on the same scale, he/she will also get the Usual Increment. Sometimes the employee gets a promotion during the year of retirement. After promotion the employee has less than 6 months of service in the promoted scale. Now according to the latest Notification of the Finance Division, such an employee will get the usual increment in the year of retirement even if his/her pay scale changed due to promotion.
• The employee who retires between 1^st Dec to next year 30^th May will not get the Usual Increment as he/she has less than 6 months service. However, if he retires on 31^st May he/she has completed 6 months of service. He/she will then get the usual increment.