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NFRRBO Urge RRBs to Stop Unilateral Tax Deductions on Perquisites
National Federation of RRB Officers (NFRRBO) has urged RRBs to stop unilateral tax deductions on perquisites, citing financial hardship for employees. The federation demands RRBs bear the tax cost, ensuring fairness and maintaining concessional loan benefits.
Author: Saurav Kumar
Published: January 29, 2025
The National Federation of RRB Officers (NFRRBO), representing officers and employees of Regional Rural Banks (RRBs), has issued a formal request to all RRB chairpersons to cease unilateral deductions of tax on perquisites from staff salaries. The NFRRBO argues that such deductions, implemented retrospectively, have caused significant financial hardship for a large number of officers and employees.
NFRRBO Calls for Immediate Action to Protect Staff Benefits
In a letter dated January 28, 2025, addressed to the chairman of all RRBs, the NFRRBO highlighted that some RRB managements have been arbitrarily deducting taxes on perquisites from the monthly salaries of staff members without any prior discussion with the unions.
The letter states, “We understand that some of the RRB managements have resorted to unilaterally deducting the tax on value of perquisites from monthly salary of staff members, from a retrospective date causing huge burden and hardship to the large number of officers and employees of respective Banks.”
The officers’ wing of the AIRRBEA further pointed out that many commercial banks and some RRBs, such as the Andhra Pradesh Grameena Vikas Bank (APGVB), have been paying this tax on behalf of their employees to avoid any financial burden and to ensure that the benefits of concessional loan rates are not diluted. The letter references a judgment from the High Court of Judicature at Hyderabad dated April 1, 2015, which supports the practice of management paying the tax on perquisites on behalf of employees.
The NFRRBO has requested all RRBs to stop these deductions and instead bear the cost of the tax themselves, ensuring uniformity and relief for staff members who have been granted concessional loans. The letter concludes by urging the immediate refund of any deductions already made and calls for urgent action to address this issue.
The NFRRBO’s appeal underscores the need for fair and transparent practices in tax management within RRBs, emphasizing the importance of maintaining the benefits of concessional loan rates for employees.