The news which supports that if you really loud and near to your government then government have to hear us. The vital objections on putting the Tax on EPF withdrawal, the government understands that country always be a country until people of that country have the possibilities to grow with happiness and prosperity.
New Delhi: Prime Minister Narendra Modi’s government on Tuesday dropped a controversial proposal to tax pension withdrawals, caving in after an outcry by salaried workers threatened to undermine his party’s prospects in upcoming state elections.
Finance Minister Arun Jaitley had proposed in his Feb. 29 budget taxing lump-sum withdrawals exceeding 40 percent of an individual’s retirement pot in the Employees’ Provident Fund (EPF), unless the sum is reinvested in an annuity.
At present, withdrawals from the EPF are tax-free.
The tax proposal sparked a backlash from small but vocal professional class, with some calling it a raid on the retirement savings of honest taxpayers. Only around 36 million of the country’s 1.3 billion people contribute to the EPF.
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The move also drew flak from opposition parties, forcing the government to change tack ahead of elections in five states in April and May in which Modi’s Bharatiya Janata Party (BJP) eyes gains.
“The policy objective is not to get more revenue but to encourage the people to join the pension scheme,” Jaitley said in a statement to lawmakers.
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