The Hindu Business Line : Steel executives plan dharna against proposed tax on house perquisite

Kolkata April 11 Steel Executives' Federation of India (SEFI) plans to stage a `dharna' in New Delhi in front of Parliament in the first week of May to protest against the proposed levy of tax on "house perquisite" for public sector employees.

According to Section 17 (2) (ii) of the Income Tax Act, 1961, income tax was levied on house perquisite if the house was provided by the employer at a concessional rate.

Rule 3 of the Income Tax Rules, 1962, stated that tax on the house perquisite would be equal to the amount of any such concession provided. However, for employees in government organisations and public sector undertakings, residing in apartments provided by the employer, it was assumed that no concession was provided since they were paying a standard rent or licence fee.

In the Finance Bill 2007-2008, the Finance Minister, Mr P. Chidambaram, has proposed an amendment in the parent Act. Among other things, he said that the concession would be deemed to have been provided with effect from the dates of amendment of the Income Tax Rules in 2002 and 2006. As a result, employees of all public sector enterprises, excluding Central Government and State Government employees, will now have to bear an extra tax burden if the amendment is adopted.

"This kind of double standard shall not be tolerated. While employees of public sector undertakings are being taxed, the same is not applicable for Central or State Government employees," said Mr S.K. Hajra Chaudhuri, General Secretary, SEFI. "While fixing our salary we are being treated as government employees but when we are taxed we are considered as private sector employees," Mr Chaudhuri added.

According to him, executive and non-executive employees of public sector enterprises including steel, coal, power, oil and telecom have given their support to the holding of the dharna

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