If the AAP Government in Delhi could afford to provide free water, electricity, transport, health and education to all the denizens of Delhi irrespective of their age and income, why can’t the Union Government exempt the pension of retired employees out of the Income Tax purview, said founding president of Gandhinagar Senior Citizens’ Forum Dr KC Panda here.
He urged the Union and State Governments either to bring an administrative order or to amend the existing provisions of Income Tax Act for exempting all the retired employees of the country from paying IT.
A superannuated employee during service for 30 to 36 years paid IT throughout. But there is no justification to pay tax again on his/her pension and hard earned savings, Panda said. After retirement, the employee is paid pension as a superannuation fund for his/her livelihood by recognising his/her valuable services rendered to the institution or the country for so many years and the pension which the retired employee receives is technically not an income for any service or work, but considered only a deferred wage, told Panda.
If the pension received by the elected representatives like, MPs and MLAs are not taxable, why the pension of retired employees come under taxable income, he questioned.
Citing examples, he said that several countries in the world much smaller than India namely, UAE, Oman, Bahrain, Qatar, Saudi Arabia, Kuwait, Bermuda, Monaco, Andorra and Cayman Islands have zero income tax system. There are a number of countries without the burden of income tax and many of them are very pleasant and tax-friendly countries, he said.