Narendra Modi has asked Arun Jaitley to defer EPF proposal: Report
Officials said the prime minister believes the plan to tax 60% of the Employees Provident Fund corpus amount at the time of withdrawal needs to be studied in detail.
The Centre on Saturday decided to defer its plan to levy a tax on 60% of the Employees Provident Fund corpus at withdrawal, after Prime Minister Narendra Modi requested Finance Minister Arun Jaitley to put the proposal on hold. According to officials, Modi has said that a detailed study needs to be conducted first, The Times of India reported. Jaitley is expected to announce the decision in the Lok Sabha on Tuesday when Parliament reconvenes. The decision was scheduled to be announced on Friday but had to be postponed as the House was adjourned till March 8 following former Lok Sabha Speaker PA Sangma’s death.
The government’s Budget provision on the EPF triggered protests from trade unions and the salaried middle class, who believe this will affect their retirement savings. The Centre justified the decision, claiming it was meant to push private sector employees to opt for a pensioned retirement instead of withdrawing large amounts. While Revenue Secretary Hasmukh Adhia had said only the interest accrued on 60% of the contributions made after April 1 will be taxed, a statement from the Finance Ministry clarified that the entire EPF amount will be taxed.