Aiboc For Rs 1 Lakh Floor: I-T Exemption
The All India Bank Officers Confederation (Aiboc) and the Professional Workers Trade Union Centre of India (PWTUC) have urged the United Front government to exempt net income of Rs 1 lakh from all sources from taxation to provide much-needed relief to the salaried class.
In a memorandum to the Union finance minister P Chidambaram, these two trade unions have demanded that as far as salaried employees go, 50 per cent of their salary should be exempted from personal income tax levy.
According to them, almost half of their salary income gets expended in unavoidable and essential areas like medicare, education and housing.
Only 50 per cent of the salary income should be subjected to taxation. Here again, Aiboc said: It should be subjected to personal taxation if 50 per cent of the salary income exceeds Rs 1 lakh.
Aiboc also wanted the finance minister to exempt dearness allowance, house rent allowance and city compensatory allowance from personal taxation since these are all essentially compensatory in nature and hence not taxable.
The same thing should also hold good for leave travel allowance and any kind of medical aid provided by the employer, they argued.
Saying that the salaried class should be provided adequate tax incentives to encash leave travel concession, these two trade unions maintained: It will improve productivity.
Apart from this, the leave travel concession monies could no way be treated as income as it gets transferred from the employer to either an airline or the railways whenever the facility is availed of. Hence there should not be any tax on this notional income, Aiboc has argued.
The PWTUC went a step ahead and suggested that agriculture income should be treated on par with personal income for taxation purposes. This should be subjected to income tax as above the suggested exemption level of Rs 1 lakh.
For personal as well as agriculture income, the union has suggested that a 30 per cent rate could be fixed for net income of Rs 5 lakh and 70 per cent for net income in excess of Rs 5 Lakh.