Should government employees pay taxes?
Should government employees pay taxes?
My personal opinion may vary when compared to others. I think should government employee pay tax or not should depend on type of job they are doing.
For ex. If that employee is doing something extraordinary for the society then there should be some bonuses or exempt for that employee if not then simply no exempt. Well that’s what my childish answer can be.
For army I don’t think there should be any tax as they are protecting nation on the cost of their life.
But for the government jobs like MLA there should not be any exempt in tax.
But there are exempt in taxes.
Let’s look at some Tax Exempt Allowances for Employees now
With many taxpayers being salaried employees, the Income Tax Act allows for a few exclusions, which helps them save on taxes. Employers grant these exemptions to employees during their years of employment. An employee must notify his or her employer that he or she wishes to claim the exemptions provided for under the Income Tax Act of 1961.
The employer would then need to calculate their taxes according to their tax slabs and subtract the tax deducted at source proportionately. There are several sorts of income that are free from taxation at various levels and quantities. Employees are frequently granted allowances such as house rent allowance, gratuity allowance, leave encashment, conveyance/transport allowance, leave travel allowance, and many others.
Salaried Employees’ Favorite Allowances
Leave Travel Allowance: LTA, or leave travel allowances, are one of the most common types of allowances earned by salaried employees. You can claim this allowance when you request for travel leave. It covers your travel expenses and allows you to deduct them from your taxes. The following exemptions are covered under LTA:
The exemption is limited to the actual travel expenditures borne by the employee within India. Again, this is merely the cost of travel and does not include costs such as hotel stays, meals, and so on.
Exemption will be granted twice in a four-year period, with regard to two travels. If the LTA is not utilized during this four-year term, it can be carried over to the next four-year period.
Employees must give documentation of travel to their employers.
House Rent Allowance (HRA): HRA is a benefit granted by companies to employees. It is included in an employee’s salary. When completing his or her tax returns, the employee can deduct the amount received as HRA.
HRA will be computed using the lowest of these items: The actual HRA provided by the employer for the period of occupancy of the house; or the actual rent paid by the employee for housing, which is less than 10% of basic pay; or the amount paid is 50% of basic salary in cities such as Mumbai, Delhi, Chennai, and Kolkata, while other cities in the country will receive 40% of basic salary as HRA.
The employee must present proof of rent in the form of rent receipts signed and stamped by the owner of the property leased to them. The rented property’s residential agreement, which includes the length of stay and the amount of rent, as well as the landlord’s PAN information.
Leave Encashment: This exemption is available to employees who have not taken their allotted leaves for the year and have chosen to accept them as uncashed leaves. This income will not be taxed under the Income for Salary heading. Exemption for leave encashment is allowed under section 10(10AA), and it is divided into two categories: government employees and other employees. Government employees’ leave encashment is completely tax-free. While other workers will be excluded from at least the following:
The average wage for ten months.
Actual leave encashment has been received.
For each year of service, receive 30 days of cash equivalent of unused leave.
The government allows a maximum limit of Rs. 3,000,000.
Conveyance or Transport Benefit: This allowance is limited to Rs. 800 per month or Rs. 9,600 per year, irrespective of actuals. This form of exception is not required by legislation.
Retirement Income:
The pension is an income received by an employee in exchange for past services to his or her company. There are two kinds of pensions:
Commuted pension, in which the employee receives a lump sum payment for previous services.
An employee receives an uncommuted pension on a regular basis. This can be paid directly by an employer or via the use of a pension programs.
Government personnel are completely excluded from paying taxes on their pensions.
Non-government employees will get one-third of their pension or Rs. 15, 000, whichever is less, if it is paid in addition to gratuity and if 100% of their pension is transferred. There is no tax if the pension is paid to family members.
Gratuity: It is paid to employees who have left their jobs after a minimum of five years. The amount of gratuity is payable to them upon retirement, resignation, or death if the employee has completed the 5-year period. Employees receiving gratuity are exempt from tax under section 10(10) of the Income Tax Act of 1961.
Employees of both the state and federal governments will be exempt from paying taxes. Defense employees and local governments are also exempt from paying taxes.
Other employees who have received a gratuity are exempt up to a half-month salary for each year of completed service or Rs. 10,000, whichever is less.
All employees covered by the Payment of Gratuity Act of 1972 will be exempt from tax up to the following limits: Government employees from both the state and federal governments will be exempt from tax. Defense employees and local governments are also exempt from paying taxes.
Other workers who have received a gratuity are excluded up to a half-month pay for each year of completed service or Rs. 10,000, whichever is less.
All workers covered by the Payment of Gratuity Act, 1972, are exempt up to the following limits: For each year of service completed, gratuity will be computed at a rate of 15 days wages as per the employee’s last drew earnings.
The maximum sum is Rs. 100,000.
Gratuity shall be determined at a rate of 15 days earnings as per the employee’s last drew wages for each year of service completed.
The maximum sum is Rs. 100,000.
That’s all we will update if we found some important information regarding this.