Central trade union representatives would be heading to Union Minister of Finance P Chidambaram’s office on Friday afternoon to put on record their list of demands for budget 2007.
At the top of the list is the demand to abolish the fringe benefit (FB) tax, a tax on the perks (for example conveyance and entertainment allowances) provided by a company to its employees. The tax was imposed in 2005 in spite of debates and protests in corporate circles.
"The tax impacts salaried employees and perks like medical allowance. We want the Government to withdraw it," Tapan Sen, secretary of the Centre for Indian Trade Unions (CITU), said.
DL Sachdev of the All India Trade Union Congress (AITUC) echoed the viewi, saying that trade unions have always been against the tax.
The trade unions would also demand for an increase in the cap of income tax slab from Rs 1 lakh to Rs 2 lakh. "The Government should also start realising tax arrears, which is currently around Rs 1 lakh crore. It is time this is realised so that more money can be put into the social sector," Sen said.
Sachdev said the emphasis of the demands would be on people-oriented economic policies from the Government.
"We want a massive allocation in the social sector, especially for workers in the unorganised and agricultural sectors. By putting in more funds in the social sector, the government can also help generate employment," he said
Sen said union representatives would also ask the government not to levy tax on retirement benefits. "There is a proposal to tax retirement benefits, like provident fund (PF), by treating it as the last income of the person. We oppose this.
"During his working years, a person gets tax rebate on PF. But the same money when he gets it after retirement, how can it be taxed. For a retired person, that money would be the source of his livelihood for the rest of his life," Sen added.
The unions would also pitch for higher interest rates on special deposit schemes (SDS), which would enable the Employees Provident Fund Organisation to disburse more greater interest rates to its 4 crore subscribers.
Sachdev said that the unions would demand that the Government reserve 25 per cent of its revenue for the sectors of education, health and housing.