New Delhi: Prime Minister Narendra Modi’s government is likely to defer the Employees Provident Fund (EPF) tax proposed in the General Budget 2016. The big announcement is expected in Lok Sabha on Friday. The Prime Minister has ordered detailed review and has asked the Finance Minister to submit his report as soon as possible so that the fiscal target could be set in immediately.
Modi has 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 exempted from the proposed levy. On Friday, 12% of the EPF income can be considered as government can only afford limited exemptions, said the sources.
EPF had seen oppositions as well as citizen’s outrage over the last several days.
The proposal will be deferred till Modi comes up with some decision on it.