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Bangiya Gramin Vikash Bank Agrees to Bear 50% Perquisites Tax Following AIRRBEA Union’s Persistent Efforts
Bangiya Gramin Vikash Bank to bear 50% perquisite tax after All India Regional Rural Bank Employees Association’s persistent efforts. Most of the RRBs are yet to receive the benefit.
Author: Saurav Kumar
Published: 22 hours ago
The Bangiya Gramin Vikash Bank (BGVB) has decided to absorb the perquisite tax imposed on interest-free and concessional-rate loans for employees. The decision comes after the continuous demand from Bangiya Gramin Vikash Bank Officers’ Association (BGVBOA).
In a directive dated March 29, 2025, the BGVB management stated, “We are now pleased to inform that for providing some relief to the employees in view of the financial hardship, Hon’ble Board of Directors in its 116th Board meeting held on 26.03.2025 has accorded approval for bearing 50% of the TDS liability on perquisite value of interest free loans & loans at concessional rate of interest by Bank w.e.f FY 2024-25 onwards in-line with the benefit given by our Sponsor Bank i.e. Punjab National Bank.”
Notably, BGVB’s sponsor bank, Punjab National Bank (PNB), has also extended partial relief by covering 50% of the perquisite tax liability. However, State Bank of India (SBI), Union Bank, and Bank of Baroda have set a higher benchmark by fully absorbing the tax burden for their own employees. Yet, as sponsor banks, they have not extended this benefit to their respective RRBs, leaving employees of these institutions to bear the remaining cost.
Triumphant Efforts of AIRRBEA Union
The Bangiya Gramin Vikash Bank Officers’ Association (BGVBOA), affiliated with the All India Regional Rural Bank Employees Association (AIRRBEA), had urged the bank’s management to absorb the perquisite tax imposed on interest-free and concessional-rate loans for employees. The demand was officially placed on February 26, 2025, citing financial distress among employees who were caught off guard by the sudden tax deductions at the financial year’s end.
A BGVBOA leader told Kanal, “Our longstanding demand was for the full absorption of the perquisite tax, but the management has agreed to cover only 50%. While this falls short of our expectations, we welcome the decision as a step forward. Our movement has consistently delivered results in favor of BGVB employees.”
Probably, BGVB is now the second RRB, after the erstwhile Andhra Pradesh Grameena Vikas Bank (APGVB), to shoulder the perquisite tax burden on behalf of its employees. However, the union is expected to continue pushing for full absorption of the tax liability, following the precedent set by other financial institutions.
This development highlights the ongoing contention between unions and RRB managements over the unilateral imposition of perquisite tax, a dispute that remains unresolved across the sector.