Finance Minister Arun Jaitley on Tuesday announced that the government had decided to withdraw its proposed tax on the Employee Provident Fund. Jaitley said the reason for the roll back is so the ministry can comprehensively review the proposal.

In the Union Budget this year, the government had decided to levy a tax on 60% of the EPF corpus at withdrawal. This had drawn widespread outrage from unions, salaried workers and the Opposition, as the EPF was a completely tax-free savings option that many from the middle class relied on as a retirement fund.

Ever since the EPF tax was announced, there has been confusion on what it actually meant. First, it was interpreted as tax on 60% of the corpus amount. Later, Revenue Secretary Hasmukh Adhia said the tax would only apply on the interest accrued. However, Jaitley later reverted to the original position on taxing the corpus. Last week, Prime Minister Narendra Modi asked the finance ministry to defer the plan so that a detailed study on it could be conducted.

The government however, decided to keep its tax on the National Pension Scheme, again to be levied on 60% of the withdrawal amount, ANI reported.