Government may roll back Tax on EPF

The government is said to be reconsidering its decision to tax the EPF or retirement fund of employees, due to huge opposition eexpressed by the salaried class

Zee Media Bureau

New Delhi: In a move to placate the salaried class, government may withdraw tax imposed on the Employees Provident Fund.

According to sources, the final decision will be taken by the Prime Minister.

Arun 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.

He also proposed a monetary limit for contribution of employer in recognised PF and superannuation fund at Rs 1.5 lakh per annum for taking tax benefit.

The proposal came under immediate attack from various employees unions including RSS-backed BMS, and political parties who termed it as "an attack on the working class and a clear case of double taxation."

Salaried class has shown resentment against the proposal to tax their retirement fund.

An online petition against retirement tax has gone viral on social media with nearly 3,000 signups seeking urgent and immediate withdrawal of EPF Tax just a day after it was announced.