Section 30(2) in The Central Government Account (Receipts and Payments) Rules, 1983
(2)Payments to pensioners are governed by rules 319 to 374 (both inclusive) and 441 of the Treasury Rules of the Central Government.Note 1. - Payments due to contractors may, if so desired by them, be made to their banks instead of direct to contractors, provided that the department concerned obtains:(i)an authorisation from the contractor in the form of a legally valid document such as a power of attorney or transfer deed, conferring authority on the bank to revive payment, and(ii)the contractor's own acceptance of the correctness of the amount made out as being due to him by the Government; or his signature on the bill or other claim preferred against the Government before settlement of the account or claim by payment to the said bank. While the acknowledgement by a bank of cheque or draft received towards payment shall constitute a full and sufficient discharge, for the payment, contractors should, wherever possible, be induced to present their bills duly receipted and discharged through their bankers. Nothing herein contained should operate to create in favour of the bank any right or equity vis-a-vis the Government.Note 2. - Income tax is required to be deducted at source at the rate of 2 per cent in all cases of payment to contractors and sub-contractors exceeding Rs.10,000 in terms of the provisions of Section 194-C of the Income Tax Act, 1961 (43 of 1961).
