But the attempt to tax the safety net of millions of hard working middle class ppl was morally wrong&shows this Govt's anti-ppl mindset(2/2)



— Office of RG (@OfficeOfRG) March 8, 2016

Finally the Govt was forced to listen to people and roll back the patently unfair tax on EPF (1/2)



— Office of RG (@OfficeOfRG) March 8, 2016

Jaitley announces roll back of EPF tax proposal

NEW DELHI: Finance minister Arun Jaitley on Tuesday announced the rollback of proposed tax on withdrawals from employees' provident fund."The purpose to tax EPF withdrawals was to encourage a pensioned society. However, In view of representations received, the government would like to do a comprehensive review of this proposal and therefore I withdraw the proposal," Jaitley said in a suo motu statement in the Lok Sabha.He, however, stated that 40 per cent exemption given to National Pension Scheme (NPS) subscriber at the time of withdrawal remains.Jaitley had in his Budget for 2016-17 proposed to tax withdrawal of 60 per cent of accumulations in the employee provident fund after April 1, 2016.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."Employees should have the choice of where to invest. Theoretically such freedom is desirable, but it is important the government to achieve policy objective by instrumentality of taxation. In the present form, the policy objective is not to get more revenue but to encourage people to join the pension scheme," Jaitley said explaining the rationale for the taxation proposal.The proposal would not have impacted 3.26 crore EPFO subscribers drawing statutory wage of upto Rs 15,000 per month. Employees Provident Fund Organisation (EPFO) has a total subscriber base of 3.7 crore.(With inputs from agencies)