Aizawl: State Bank of India (SBI), India’s largest multinational, public sector banking and financial service statutory body, on Wednesday reversed its decision of deducting Tax Deduction at Source (TDS) amounts from all eligible bank deposits and agreed to maintain status quo due to pressure from civil society groups.
In a letter addressed to Mizoram NGO Coordination Committee chairman Vanlalruata, SBI regional manager Dibendu Chaudhuri said that those SBI branches where TDS flag were to be made “yes” will be reverted back to “no” thereby maintaining status quo.
The development came after NGO Coordination Committee, a conglomerate of major civil societies and student organisations in Mizoram, threatened indefinite strike against SBI in protest against the bank decision to deduct TDS.
Responding to a call given by the committee, volunteers of civil society and student bodies on Wednesday held picketing before SBI offices across the state preventing the officials and staffs from attending their offices and executing their daily duties.
The proposed indefinite strike, however, was called off at 1 pm after the SBI succumbed to the NGOs demand and agreed to maintain status quo, Vanlalruata said.
The civil society groups have strongly opposed to the decision to levy income tax on Mizo tribal and had asked the bank officials to revoke the order and maintain status quo.
They said that the scheduled tribes in Mizoram, Arunachal Pradesh, Manipur, Nagaland and Tripura or in other areas are exempted from paying income tax under section 10 (26) of the Income Tax Act, 1961.
The issue of SBI deducting TDS amount also got mentioned in the assembly house.
Official sources said that the state government has also written to the Centre and SBI officials to reverse the order and exempt tribal people from TDS.
The SBI, in its notification issued recently, said TDS will be deducted from all eligible bank deposits at the rate of 10% if annual interest income on all bank deposits held by the individual crosses Rs 10,000 for general public and Rs 50,000 for senior citizens as directed by the Centre under TDS rules of Income Tax Act, 1961.
The notification said that income tax exemption for scheduled tribes under section 10(26) of IT act 1961 has no bearing in the issue of TDS on bank deposits.
However, TDS deduction can be exempted on production of tax exemption certificate issued by income tax department, the notification added.