Monday, March 28, 2011

STAY ON REMITTANCE OF TDS DEDUCTED ON CONTRIBUTION TO 2ND OPTION PENSION COST

It is reported that Corporation Bank Officers’ Organisation  filed a writ petition WP(C) No.8399/2011 (Y) in the High Court of Kerala at Earnakulam on 17th March 2011, challenging the deduction of income tax on 2.8 times of revised Basic Pay as on 01.11.2007, being the contribution to the pension fund out of salary arrears, towards additional cost of 2nd Option on Pension. 
This petition came for admission, upon perusing the petition and the affidavit filed in support of the WP( C) and upon hearing the argument of M/s B. Krishnan and Parthasarathy, advocates for the Petitioner and standing counsel for Management of the Corporation Bank, the Court passed the order.
Standing counsel appeared on behalf of Management of Corporation Bank, urgent notices issued to respondents 3 to 5 viz. The Ministry of Finance, CBDT, and IBA and standing counsel for Income Tax Department is directed to get instruction and to take steps to file counter affidavit. Counter affidavit of respondent viz Management of Corporation Bank, shall also be filed in the meanwhile.
There will be an interim stay against Management of the Bank from deducting TDS amount, which is being appropriated to the corpus of pension fund under 2nd Option Pension scheme for a period of three months. It is made clear that, the amount equivalent to the tax element shall not be disbursed to the employees out of the arrears of salary. The case is posted after vacation.
Further, it is reported that some banks (like PNB and Corporation Bank) are already in the process of issuing instructions for non remission of TDS on contribution to 2nd pension option.
Source : Allbankingsolutiuons

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