How Does New Income Tax code is unfair to the salaried ?
How Does New Tax code is unfair to the salaried ?
The “most unkindest cut of all” could turn out to be new Code. Consider these:
* For umpteen years, VRS payment, commuted pension and retirement gratuities, received by employees on retirement have been considered exempt without any conditions. These are now to be considered as salary income and should be subjected to tax, if these are not invested in permitted savings/intermediary in accordance with the scheme framed and prescribed by the central government. Also, the retirees will have to keep such amounts locked in the account indefinitely as any withdrawals made or amounts received, under whatever circumstances from this account, are to be included in the income of the persons.
* A person saves during his service period so that when he retires, the drop in his income may be made up, to some extent, by accumulated savings invested in the manner he thinks appropriate. Also, money may be required to meet the family obligations like marriages of the children, their education, unexpected illness, etc. Once the code comes into force, this would be possible only after the payment of income-tax, which could be as high as 30%. This amounts to autocratic decision-making.
Under the new Code, the salary will also include, inter-alia, the following:-
* The value of rent-free or concessional accommodation provided by the employer, irrespective of whether the employer is government or any other person. The value of rent-free accommodation is to be determined for all employees in identical way.
* The value of any leave travel concession.
* The amount received on encashment of un-availed earned leave or retirement or otherwise.
* Medical reimbursement.
* The value of free or concessional medical treatment paid for or provided by the employers.
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