Thursday, March 20, 2014

Indian Tax System and Effect on Central Government Employees.


Comrades, 

The Central Government has been informing the general public that crores of rupees were spent on salary and pension of Central Government Employees. In fact the following are facts out of total revenue of Central Government the share of CG Employees towards Salary, perks and pension amount is just 10.47 % of the total revenue of the Central Government which was earlier 16% at the.time of 6th CPC. They are in forming that 7th CPC will cost exchequer Rs 25,000/ thousand crores which will effect Central Government finances. 

Secondly the Central Government Employees are paying tax for every rupee they earn including the all allowances, in fact the 5th CPC has recommended that the Central Government should not deduct any Income tax on these allowances. apart from income tax, all other taxes are also imposed just like other employees. 

Further the Fifth Central Pay commission in its report vide para no105.12 has said that Dearness allowance should be paid free of net taxes as the DA is paid for compensation against price rise. The all allowances should also be paid net of taxes which has been examined by 5th CPC in para no 167. 

Today according to various media reports, only 2 to 3 percent of Indians pay any income tax at all. In December, India’s finance minister, Palaniappan Chidambaram, said that 2.89 percent of the population (about 36 million people) filed income taxes. (In contrast, in the U.S., about 45 percent of the population pays taxes, which means that, despite India’s much-larger population, more Americans than Indians actually pay taxes.) CLICK HERE FOR DETAILS . 

Totally a Central Government employees pay upto 30% of their salary as all forms of tax to the Central Government, even if these is any increase of salary upto 40% then also,part of the increase will also go to Central Government as revenue. 

India's tax revenues nearly about Rs 14 lakh crore currently can be increased to over Rs 40 lakh crore. if proper taxation policy is adopted , that means majority of citizens of the country should be uniformly taxed. 

Corporate tax collection is at Rs 2.05 lakh crore, the personal Income Tax collection, however, was at Rs 1.19 lakh crore that is just 10% of the total revenue collection. 

According to Central Government sources Corporates owe over Rs 2.46 lakh crore in taxes, total tax dues to the Central Government is around Rs 5 to 6 lakhs crores. The amount paid to CG employees for the 7th CPC is just 5% of tax dues to the Central Government. CLICK HERE FOR REPORT so there should not be much financial panic on 7th CPC impact on common man.

If these dues are properly collected then Central Government can spend lot of money on the welfare schemes and also pay the Central Government Employees being a model employer handsomely pay us on par with the global market, Software companies. 

So comrades , the Indian tax system should be re modeled so that proper tax system is there and every citizen of India should have uniform tax policy andCentral Government revenue should also improve and also the Government Employees are paid need based minimum wage or a decent wage, also filling up of vacant post in Central Government will also give employment to younger generation. 

Comradely yours 

(P.S.Prasad) 
General Secretary 

Source : http://karnatakacoc.blogspot.in/

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