The Hindu Business Line : Madras HC stays cut in tax on perks

THE Madras High Court has granted an interim stay of the operation of the provisions of Section 17 (2) (vi) of the Income-Tax Act regarding valuation of perquisites for I-T purpose, on a writ petition filed by the All-India Bank Officers' Association.

Pursuant to the interim order passed by the High Court at Chennai on April 1, the bank managements have now advised the branches and offices not to give effect to any deduction of tax on perquisites in terms of such provision of the I-T Act, until further order of the High Court.

The communication has stated that where the tax has been deducted at source on the perquisites value, but yet not deposited with the Government Account, the same `need not be deposited at this juncture', and be kept in Sundry Creditors Account, subject to further order of the Court.

A Trade Union Forum Viewsletter, calling taxation of perquisites a `mockery of taxation', has pointed out that the RBI Officers Association had requested the Bank to bear the additional taxation burden by granting a Sumptuary Allowance to all cadres of employees affected by the amended I-T Rules.

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