Taxing arrears!

According to sources in the Finance Department, the employees/pensioners will have to pay about Rs 1,200 crore as I-T on the total arrears of Rs 6,000 crore to be deposited in their GPF, following the government8217;s decision to implement the pay panel8217;s recommendation with retrospect from Jaunary 1, 2006. Besides, the serving employees will have to cough up another Rs 600 crore in I-T as a result of the hike in their salaries.

A senior official said on Tuesday that since the Centre would get a substantial amount in I-T from the state government employees, it would urge the former to share at least 50 per cent of the total financial burden the state exchequer would have to shoulder in the coming days.

The official added that although the government had agreed to hike salaries as per the pay panel recommendations, the employees would continue to get medical and transport allowances as provided by the Fifth Pay Commission.

The government also turned down the employees8217; demand for an educational allowance of Rs 1,000 per child up to two children for higher studies.