Finance Minister Arun Jaitley announced in Lok Sabha on withdrawal of tax proposal on EPF. Buckling under pressure, the Modi government on Tuesday announced in Parliament that the proposal to tax 60 per cent of Employees’ Provident Fund has been withdrawn. “We propose to withdraw the tax… the tax proposal for NPS scheme has been retained,” Finance Minister Arun Jaitley said in Lok Sabha on Tuesday, adding that “the intention was to encourage a pensioned society”. In his budget proposal, Jaitley had proposed that 40 per cent of the EPF withdrawals would be tax exempt and the remaining 60 per cent would also get the same treatment provided the amount is invested in pension annuity schemes.
This proposal was criticised by the parties and the unions which said it amounted to forcing employees to invest in pension annuity schemes. Congress vice president Rahul Gandhi reacted to the development in Parliament, saying: “I felt middle-class people were being hurt by government, so I decided to put some pressure. Happy that they’ve got some relief”.
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