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Income Tax Relief on Pay Commission Arrears

While every government employee find himself in dilemma to be happy or not. Sixth pay Commission stand implemented and they are pronounced to richer by 21%. But what is not announced is that a big chink of what employees will get is taken back in terms of Income Tax. Even the group C employees are bracketed in 30% slab due to arrears. What is more objectionable is the fact that while they will get only 40% of the due arrears in this financial year but they will have to pay tax on whole arrear rather then a part thereof. To do so, Income Tax Department is taking refuse in an earlier SC directive that empowers the govt to levy tax on due hike rather than actual payment. What this whole jargon implies to common employees is that they actually end up getting their arrears minus 30% of the total due arrears.

Now there is news as reported in Karmchari's Blog that employees may get option to stagger their arrear income into last three years instead of considering it income of one year only, it will help some to get the lower tax slab rather then higher one.  General feeling though is that government is giving by one hand and taking back by other.

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