Wednesday, 9 March 2016

Govt Buries EPF Tax Under Pressure From The Salaried Middle Class

✍After a week the announcement of Budget 2016, Finance Minister Arun Jaitley on Tuesday came back his controversial Budget proposal to tax Employees' Provident Fund (EPF) withdrawal. Finance Minister had announced that 40 per cent of the total corpus withdrawn from the EPF would be tax-exempt and the balance 60 per cent would be taxable unless the amount is used to buy an annuity product. Mr. Jaitley also took back his earlier proposal to tax contribution made by an employer beyond Rs 1.5 Lakh a year to EPF. Both the proposals had drawn strong protest from the Opposition, trade unions and the salaried class.

✍ In his statement, Finance Minister stated that a number of representations had been received from various sections of the society, including MPs, suggesting that this would force people to invest in annuity product even if they were not willing to do so.

✍The Employee Provident Fund Organization (EPFO) has around 37 million members across India. As many as 30 million of them earn less than Rs 15,000 a month, who would not have been impacted by the Budget proposals.




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