Decision taken after proposal to levy tax on 60% of withdrawals from EPF received sharp criticism
New Delhi: Under all-round attack, the centre yesterday promised to consider demands for a partial rollback of the proposal to tax 60 per cent of withdrawals from Employees’ Provident Fund (EPF) and a ceiling on an employer’s contribution.
Union Finance Minister Arun Jaitley. Pic/PTI
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But made it clear that PPF will continue to be tax exempt. Earlier in the day, Revenue Secretary Hashmukh Adhia said only 60 per cent of interest on contributions made after April 1, 2016 will be taxed and that the principal amount of contribution will remain untouched at the time of withdrawal.
However, in the evening a government press note said a proposal to tax only interest and not principal is under consideration. The press note also stated that the new tax proposal was aimed at taxing only the high salaried individuals totalling about 70 lakh people out of the 3.7 crore EPF members.
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