Prime Minister Modi asks FM to review EPF tax

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Saturday, March 5, 2016
New Delhi

  • Prime Minister Narendra Modi has asked Finance Minister Arun Jaitley to review the Budget proposal to tax withdrawals from the Employees' Provident Fund (EPF).
  • It is known that the Finance Minister had proposed that 60 per cent of the withdrawal on contributions to EPF made after April 1, 2016 would be subject to tax. The move will hurt the salaried class. The announcement in the Parliament has initially created confusion. The government clarified that the tax will apply on to the interest component and that too for voluntary contributors.
  • The proposal has drawn flak from all directions. Following the resentment, the government is likely to rollback the proposed tax and a ceiling on the contributions by employers.
  • The opposition parties also mounted pressure on the government. Addressing a rally in Assam, Congress vice-president Rahul Gandhi has vowed to continue fighting the Government on the issue. Rahul Gandhi said that the Modi government is promoting the interests of a few selected industrialists and is punishing the salaried class by taxing their life-long savings.
  • The All-India Mahila Congress held protests outside the BJP office in New Delhi.
  • The trade unions are gearing up to raise the issue at the EPFO trustees' meeting.
  • Meanwhile, Finance Minister Arun Jaitley has said that the ministry is considering representations on the matter. He said a final decision would be announced in the Parliament. The intention is not to raise revenue, but work towards a pension-ensured society, the FM said.\

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