Confdn/05 /2010
Dated: 18.02.2010
Dear Comrades,
The last National Sectt. Meeting inter alia discussed the possibility of a joint action programme with the AISGEF and AIDEF in the event of the Government introducing the PFRDA Bill and the new direct taxes code in the Budget session of the Parliament. While the AISGEF was to take a decision in the matter in their all India Conference which was scheduled to be held in the first week of February at Hyderabad, the AIDEF had promised us to discuss the issue in their organizational fora and revert back to us. So far we have not received any communication from the AIDEF. The All India Conference of the AISGEF had to be postponed due to the ongoing agitation in Andhra Pradesh. Hence, no finality could be reached on the proposal for organizing a day's strike somewhere in March, 2010.
The Budget session is likely to commence on 22nd Feb.2010. The National Secretariat had discussed of the necessity of organizing a demonstrative programme in the first week of the Parliament session. It was decided that Lunch recess programme should be organized in front of all offices eliciting the participation of all the employees in the respective office on a pre determined date. Taking into account the requirement of sufficient time to organize the programme, we call upon the affiliates and State Committees to ensure that the lunch hour demonstration is organized in front of all offices on 10th March, 2010 to oppose the introduction of the new Direct Taxes code and the reintroduction of the PFRDA Bill and to oppose the phenomenal increase in the prices of all essential commodities an offshoot the neo linberal economic policies of the Govt. of India. The life of common people especially the wage earners has been made miserable. The following telegram/Savingram may be sent to the Hon'ble Finance Minister, Shri Pranab Kumar Mukherji, (at North Block, Central Sectt. New Delhi.)
Reintroduce the statutory defined benefit pension scheme for all CGEmployees recruited after .1.1.2004 by withdrawing the PFRDA Bill and amend the direct taxes code as demanded in the memorandum submitted by the Confederation of CGE and Workers .Strengthen the Public distribution system by making all workers and all essential commodities within its ambit.
Enclosed herewith is a copy of the letter sent by the Confederation to the Hon'ble Finance Minister in response to the draft proposal placed on the website by the government.
With greetings,
Yours fraternally,
K.K.N. Kuty
Secretary General.
CONFEDERATION OF CENTRAL GOVERNMENT
EMPLOYEES AND WORKERS
Manishinath Bhawan,
A/2/95 Rajouri Garden
New Delhi.110 027
Website: www..confederationhq.blogspot.com
Email; confederation06@yahoo.co.in
Phone : 011-25105324
9811048303
No.D/16/2009 Dated 25th November, 2009
To
Shri Pranab Kumar Mukherjee,
Hon'ble Finance Minister,
Government of India,
North Block,
New Delhi.
Dear Sir,
Sub: New Direct Tax Code – To replace the IT Act, 1961 –
Suggestion – Submission of.
** **
Confederation of Central Government Employees and Workers represent the Central Government Employees working in various departments under Government of India, other than Railways and Defence. We have been directed by the National Executive Committee of our organization, which met on 13.09.2009 to submit the following for your kind consideration while bringing in the new legislation on Income Taxation with respect to the New Direct Tax Code proposals placed on website on 12.8.2009.
1. We find that the tax structure proposed under the new Direct Tax Code is highly skewed in favour of the persons belonging to higher income bracket as is evidenced from the following table:
2. The deduction/exemption of income must not be replaced with tax incentive in the case of salaried class of employees for "deductions" are permanent in nature whereas tax incentive are only for the period where such income is locked up in specified investments. The salaried employees do not have income for keeping in the permanent investment portfolio. They can do so only for a limited period.
3. The specified investment portfolio approved by the PFRDA is not insured against vagaries of speculation.
4. The deduction of PF contribution which has now been made as an incentive, having been made to suffer tax on withdrawal on EET basis, is not acceptable.
5. The proposal to tax the HRA, Medical reimbursement, LTC, etc. which were hitherto given exemption, thereby increasing the tax liability is not acceptable as it amounts to reduction in salary. Therefore, the non taxable maximum in the case of salaried employees must be raised to Rs.5 lakhs. The said suggestion is made taking into account the fact that various deduction presently available have been either withdrawn or converted into tax incentives attracting taxation at the time of withdrawal [ such as LTC, Leave encashment, interest on Government securities, family pension, deduction u/s 80C, 80D, 80DDB etc.]
6. The proposed withdrawal of deduction presently available for House Building loans and interest thereon would not only make the aspiration of a salaried employees to own a house a mirage but would also act as a disincentive for construction activities rendering thousands of workers in that sector redundant. This proposal therefore deserves to be dropped.
7. The area of perquisite taxation must not be enlarged to cover the small income salaried tax payers as what is provided to them is not perks in its real sense but only as a part reimbursement of an eventual and inevitable expenses one is to incur to remain employed.
8. To augment the revenue resources of the Government, it is necessary that the exemption, which is allowed to remain in the new Direct tax Code for the Charitable Institutions and non profitable organizations is withdrawn.
9. Make provisions in the statute for quoting PAN mandatory for all ITS data to be submitted to the Income Tax Department in AIR forms.
10. The Direct Tax Code ought to have attempted to widen the tax base and taxation at increased rates in the case of taxpayers who derive income from Business and Profession given to the fact that the tax GDP ratio in our country stood 17.7 percent compared to 30.1 percent in Switzerland, 40 percent in Germany, 50 percent in Denmark, 39 percent in U.K and 28.2 percent in USA.
11. Assessing at least 10 percent of the black income pervading in our economy would result in doubling the GDP in a few years with the concommitant benefit of increased revenue generation. The new tax code has no proposal to address the need for unearthing the black income.
12. The new tax code has also not appreciated the irrefutable fact that the salaried tax payers do not avoid tax liability stipulated by the statute and they are the honest tax payers. They ought to have been treated differently and should have been given specific exemptions and deductions or retained the existing one.
Thanking you,
Yours faithfully,
(K.K.N. Kutty)
Secretary General