EPF tax shocker: Finance Ministry to offer relief from tax as PM intervenes; announcement likely on Tuesday

Sensing the outrage among salaried class on the Budget proposal to tax EPF withdrawals, PM Modi is reported to have intervened, following which the Finance Ministry has reviewed the proposal and is likely to offer some relief to taxpayers.

Zee Media Bureau

New Delhi: Sensing the outrage among salaried class on the Budget proposal to tax EPF withdrawals, Prime Minister Narendra Modi is reported to have intervened, following which the Finance Ministry has reviewed the proposal and is likely to offer some relief to taxpayers.

As per reports, the Finance Minister was to make a statement on the revised proposal in the Parliament on Friday, but both the Houses were adjourned due to former Speaker P A Sangma's death.

The government is likely to announce some relief on the EPF withdrawal tax, if not complete rollback, as early as Tuesday, when the House reassembles.

Meanwhile, Labour Minister Bandaru Dattatreya today said that he is holding discussions on the controversial budget proposal to tax EPF withdrawals with the Finance Ministry and government will reveal final details on the issue during the debate on Budget.

"As the Labour and Employment Minister, I am discussing with the stakeholders and also I am discussing with the Ministry of Finance and we are in touch with all concerned people, including trade unions.

"So, now all these things will be revealed out at the time of the debate of the Finance Budget in the Parliament itself by Finance Minister (Arun Jaitley)," he said.

Jaitley in his Budget for 2016-17 had proposed that 60 percent of the withdrawal on contribution to employee PF made after April 1 this year will be subject to tax. This would apply to superannuation funds and recognised provident funds including EPF.

The proposal has come under attack from parties, unions and other stakeholders. Stepping up pressure on the Centre, Congress Vice President Rahul Gandhi today said he will continue to fight till it rolls back the proposal for levying tax on EPF withdrawals.

Following a backlash from employees union and political parties, Jaitley has already signalled willingness to reconsider the proposal.