New Delhi: Finance Minister Arun Jaitley announces rollback of Employees Provident Fund (EPF) tax scheme in Lok Sabha. This decision of the Finanace Minister is a huge win for the middle class.
The Prime Minister had earlier ordered a detailed review and had asked the Finance Minister to submit his report as soon as possible so that the fiscal target could be set in immediately.
Modi had asked Jaitley to do away with tax imposed on EPF withdrawal after a massive row over the proposal. According to sources, Modi requested Jaitley to revisit the proposed tax on 60% of Employees Provident Fund withdrawal.
The government is taking several options into consideration to lessen the impact of the proposal on the salaried middle class in view of the protests from within the BJP, Opposition and other quarters.
For now, the Budget is proposed at 60% of the EPF amount at the time of withdrawal and the deposits made up to March 31, 2016 would be exempt from the proposed levy. As per sources 12% of the EPF income can be considered because the government can only afford limited exemptions.
EPF had seen opposition as well as citizens’ outrage over the last several days.
The proposal will be deferred till Modi comes up with some decision on it.