Union Bank employees have received major relief as the bank has decided to bear the tax on perquisites offered to its staff. This announcement comes as a huge relief for employees, especially after many faced negative salaries in February 2025 due to tax deductions.
Understanding Perquisites and Why They Were Taxed
Perquisites, often called “perks,” are additional benefits given to employees apart from their regular salary. In banks, these benefits include low-interest or interest-free loans.
For example:
- General public gets a car loan at 9% interest
- Bank employees get the same loan at just 5.5%
This reduced interest rate is considered a financial benefit for employees, similar to extra income. A court ruling recently required banks to deduct tax on such perquisites. As a result, employees saw unexpected salary deductions, with some even getting negative salaries in February 2025.
Union Bank Steps Up: A Relief for Employees
Amid growing concerns, Union Bank of India has taken a bold step by announcing that it will absorb the tax on perquisites. This means employees will no longer face salary cuts due to these benefits.
The issue of taxing perquisites has been a hot topic among public sector bank employees. Recently, Punjab National Bank (PNB) announced that it would bear 50% of the tax on perquisites. Canara Bank has announced to bear complete Tax on Perquisites. Following this move, employees from other banks have urged their management to provide similar relief.
