The recent decision by the Madras High Court and Bombay High Court to increase the Tax Deducted at Source (TDS) on bankers’ perquisites, including interest-free festival advances and concessional staff loans, has sparked significant controversy. Now, the organization Team We Bankers is set to challenge this decision in the Supreme Court of India, arguing that the ruling is not only discriminatory but also a clear violation of employee rights.
The Discriminatory Nature of TDS Hike: The increase in TDS specifically targets bankers, while government employees (Bodies), MPs, MLAs, ministers, and even judges enjoy similar benefits either tax-free or at subsidized rates. These benefits range from free residential accommodations to tax-free fuel and medical facilities, which are not subjected to the same tax scrutiny. This discrepancy raises questions about the fairness and equality in tax policy, highlighting a potential breach in the principle of one nation, one tax system.
Impact on Bankers’ Lives: The new TDS rates are expected to have a profound impact on the financial well-being of bankers. For the next three months, from January to March 2025, many bankers may face situations where their take-home salary could be negligible or even negative due to this additional tax burden. This could lead to:
- Financial Strain: With a significant portion of their salary being withheld for TDS, bankers might struggle to meet basic living expenses, exacerbating financial stress.
- Quality of Life: The reduction in disposable income could affect their ability to afford education, healthcare, or even basic sustenance for their families.
- Mental Health: The constant worry over finances could lead to increased mental health issues among the workforce, potentially affecting productivity and morale in banks.
Rights Violation: The decision to hike TDS is seen by many as a violation of:
- Right to Equality: By treating bankers differently from other government employees, this policy infringes on the constitutional right to equality before the law (Article 14 of the Indian Constitution).
- Right to Livelihood: The financial implications of this TDS hike could threaten the livelihoods of many bankers, challenging their right to an adequate standard of living.
Government’s Role and Immediate Relief: There is a pressing call for the government to provide immediate relief measures to mitigate the effects of this TDS increase.
Legal Action and Public Support: Team We Bankers has announced plans to file a petition in the Supreme Court, emphasizing the need for a uniform approach to employee benefits taxation. They are seeking public support and have highlighted this issue on social media platforms, rallying under the hashtag #TDSonPerquisites, indicating a broader public discourse on justice in tax policy.
As the case moves to the Supreme Court, it will not only be a test of judicial interpretation of tax laws but also a reflection on how India treats its workforce across different sectors. This scenario underscores the necessity for policies that promote fairness and consider the socio-economic implications for all employees, especially in public service roles.
