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| Review Employees' Provident Fund Ta |
| Review Employees' Provident Fund Tax Proposal, PM Tells Arun Jaitley: Sources
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| INDIA
, 5-March-2016
7:42:16 AM |
| Prime Minister Narendra Modi has asked Finance Minister Arun Jaitley to "explore ways to review" the new Budget proposal to tax Employees' Provident Fund or EPF withdrawals, sources have told NDTV.
In his budget, Mr Jaitley had proposed that after April 1, 2016, 60 per cent of the amount deposited in the EPF account of the employee will be taxable at the time of withdrawal, while 40 per cent will be tax free. Earlier, the entire EPF deposit was tax free at the time of withdrawal if the employee has completed five years of continuous service.
Following criticism from people affected, the opposition, trade unions and even RSS affiliates, the Finance Minister had at a meeting of NDA lawmakers last Tuesday explained the proposal and had said that any decision on a reversal would be taken by the Prime Minister.
Sources say the government may consider two options - first a proposal to tax only the returns on withdrawal and second a possible rollback of the provision. While taxing the interest on the withdrawal would need only a clarification of intent in Parliament, a rollback may need an amendment which may be moved when the Budget comes for discussion in the Lok Sabha.
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