The Hindu 11.02.2010
Sanitation workers in GVMC paying IT
G.V. Prasada Sarma
| They are paying a tax of Rs. 61 on their wage of Rs. 2,886 a month |
IT being deducted at source from their wages since 2007
20 p.c. tax will be deducted from April 1 if PAN number is not furnished
VISAKHAPATNAM: With yet another Union Budget approaching, the salariat and the corporate sector are abuzz with speculation over tax proposals.
The sanitation workers in the Visakhapatnam Municipal Corporation are also a worried lot since their tax burden may go up. As it is, they are paying a tax of Rs.61 on their wage of Rs.2,886 a month, excluding PF and ESI.
The income tax is being deducted at source from their wages since 2007. During their inspection the IT officials found that tax was not deducted on the wages of the sanitary workers paid through about 375 residents’ welfare associations (RWAs). Under Section 194 (C) of the Income Tax Act societies have to pay income tax if a bill payment exceeded Rs.20,000 or an annual payment Rs.50,000. Since then, the monthly income tax is being deducted from the meagre wages of over 5,000 workers, according to P. Venkat Reddy, President of Greater Visakha Municipal Corporation Employees’ Union.
The union has been urging the corporation to either get an exemption or pay the tax itself. The issue came up for discussion during talks with GVMC officials in 2008 and 2009 but no action has been taken, he alleges.
The practice of deducting IT has also been going on in other civic bodies in the State, he says.
The RWAs have to get themselves registered under the Societies Act to claim tax exemption as they are paying wages to sanitation workers for services rendered, says a Greater Visakhapatnam Municipal Corporation official when contacted. Alternately, they can get a Permanent Account Number, file returns and get the refund which they can distribute among individual workers.
But the GVMC is in no position to insist upon the RWAs on the tax issue. RWAs are voluntary associations formed for public-private participation in sanitation work and are unwilling to take upon themselves additional tasks.
Come April 1, the tax deducted will be 20 per cent if PAN number is not furnished, according to an IT Department Circular. Thus the tax burden for poor sanitation workers will go up.
