Tax on EPF withdrawals misunderstood, says Adhia
With pressure mounting on the government to roll back the proposed tax on Employees Provident Fund (EPF) withdrawal, revenue secretary Dr Hasmukh Adhia, once again clarified on Saturday , that it was not a tax on EPF, and the government’s move was to encourage people to go for pension products. He said finance minister Arun Jaitley will shortly clarify the matter during a debate on budget.
According the revenue secretary , the government has not taxed EPF . Upon retirement, a person can withdraw 40%, but for the remaining 60%, the expectation is that one should put in that amount in some pension products.
Attributing the confusion to a communication gap over the budget proposal regarding EPF withdrawal, Adhia, speaking in Ahmedabad at a special discussion on Union Budget 2016, said the confusion occurred when they tried to reduce the size of the budget speech. If we had paraphrased the whole paragraph decently , then probably less confusion would ha ve been created.
“It is not a tax on EPF , which has got 3.7 crore contributors.Originally EPF was created for labourers with wages under a limit. Now the limit is Rs 15,000 per month. Around 45 lakh members have joined EPF as voluntary members,“ he added.
prabhat khabar epaper 6/03/2016 : http://epaper.prabhatkhabar.com