Central Government withdraws EPF Tax Proposal on NPS Schemes

Central Government announced in parliament that to encourage the pensioned society the proposal to tax 60 % of provident fund of  employees has been withdrawn. Finance Minister Jaitley said on Loksabha that the government is proposed to withdraw the tax proposal of NPS Scheme and it has been retained as it is.

EPF Tax

Earlier in Budget proposal Jaitley has proposed only 40% of withdrawals will get exemption from tax benefit and remaining 60% would get the same except the person invested in annuity schemes.This proposal git great criticism from all the parties which makes employees to invest in pension annuity schemes forcefully.

The Budget proposal has severe impact on more than 3.26 crore Employee Provident Fund Organization (EPFO) members who draws Rs 15,000 per month. All unions threatened to stage protest against the statement made by Jaitley in Budget session of the parliament.seeking the immediate withdrawal of the proposal.

Salaried people who depend on salaries for their living and after retirement they depend mainly on EPF savings for all other purposes. If tax is levied it would be the big burden for retired employees.On his speech on February 29th budget speech he proposed tax on 60% tax on withdrawals of EPF contributions.