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in parliament that to encourage the pensioned society the proposal to tax 60 % of provident fund of  employees has been withdrawn.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.

List of Items that will turn costlier and Cheaper in Union Budget 2016.

Finance Minister Arun Jaitley unveiled the budget with rural aid schemes for poor on Monday.He expects that India would go 7.6% in the fiscal year and government wants to spread the benefits to 1.3 billion people and with assured reforms in every aspect with fiscal financial discipline India remained a bright spot in global economy. Jaitey imposed 15% excise duty on Tobacco products. In addition he also levied Krish kalyan and Infrastructure cess on all services which includes various payment of bills and eating outs.

Union Budget 2016

In budget the following items are turn into costlier. Cars, Cigarettes, Tobacco, Guthka, Rolled paper beedies, Cigar, Service related Bill payments ,Travel and eating out. Ready made garments and branded apparels of more than Rs 1000 are going to be more costlier than earlier.Mineral and Sugar added aerated water or sweetening prices are also going to increase.Various Goods and Services like Aluminum foil of above Rs 2 Lakh in Cash, Air Travel, Local made Mobiles, Plastic bags and sacks, Ropeway & cable car rides, Imported imitation jewellery, Watching Movies in Theater, Industrial solar water heater, Legal services, Lottery Tickets, Traveling by hiring stage carriage, Hiring of packers and movers, E- reading devices,Instruments for Voice Internet Protocol (VOIP),Imported Golf Cars and Gold bars are some of the items which are going to be expensive.

On the other hand items like Solar lamp, CCTV cameras, Foot wear, Digital video recorders, Routers, Setup boxes, Broadband modems, Hybrid electric vehicles, Sterilized dialyser,Pension plans, Microwave Ovens, Sanitary pads, Napkins, Tampoons, Braille paper, Refrigerated Containers, Low cost houses with less than 60 sq mt carpet area will turn cheaper when compared to earlier prices.