The government bank employees are receiving salary in negative this month. This might seem to be a little weird but this is happening. Check salary slip given below. The below salary slip is of a Manager working in UCO Bank.
As you can see in salary slip, the net salary is in negative. The net salary is -1810.79 rupees. This is so because the banks have been asked to deduct Tax on perquisites from the salary of employees. What this means?
Bank Employees get some job benefits such as loans on low rate of interest. For example – Rate of interest for Car Loan for normal public is 9%. Bank Employees get loan at 5.5%. As the rate of interest is low for Bank Employees, they are able to save some money in loan and this is counted as Perquisite. Now, Bank Employees have been ordered to pay tax on this Perquisite. This means that tax will be paid on the difference in amount due to difference in Rate of Interest. In case of car loan, if normal public pays Rs.1000 interest but Bank Employees pay Rs.700 interest, then Bank Employees need to pay tax on difference amount i.e.Rs.300.
Some Banks such as SBI and Bank of Baroda have agreed to pay this tax on behalf of their staff. This means that SBI and Bank of Baroda employees need not pay Tax on perquisites from their own salary slips. This is a highly motivating decision from both the big public sector banks in India. But other public sector banks have asked their employees to pay the tax.
This is totally demotivating as loans at low interest rate was a big perk offered to Bank Employees. The allowances and job benefits offered to Bank Employees are less as compared to other government jobs. Other government departments also offer a lot of benefits to their employees but right now, only banks have been asked to collect tax from their employees.
Either the government should remove this Tax liability on perquisites for Bank Employees or Banks should pay the Tax on behalf of employees. If this is not done, then it’s expected that it might lead to loss of talent for banking sector in India. Banking Job may become less attractive for youth and they might search other jobs with lucrative offers and perks.
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