Thursday, May 26, 2016

No discrimination if SBI lending rate is basis to tax concessional loan of all bank employees: HC


a)   Petitioner (‘All India Union Bank O icers Federation’) filed a writ petition before the High Court challenging constitutional validity of section 17(2)(viii) of the Income-tax Act, 1961, read with Rule 3(7)(i) of the Income-tax Rules, 1962.

b)  Section 17(2)(viii) provides the method for computation of perquisite value of interest free or concessional loan provided by an employer to his employee on the basis of interest rate charged by the State Bank of India (SBI).

c)  Petitioner challenged the constitutional validity of aforesaid section by contending that it was unfair to compare the rate of interest charged by the individual banks on the loans advanced to their employees with the rate of interest o ered by the State Bank of India as each bank fixed its own rate of interest, depending upon the economies of their operation.