Finance Minister Arun Jaitley Rolls Back EPF Withdrawal Tax
Finance Minister Arun Jaitley has announced rolling back of his controversial Budget proposal which proposed taxing Employees' Provident Fund (EPF) withdrawal. According to the budget proposal, 60 per cent of the withdrawal amount was taxable unless the amount was used to buy an annuity product. FM also took back his earlier proposal to tax contribution made by an employer beyond Rs 1.5 lakh a year to EPF.
With this announcement status quo has been restored with respect to taxation of the EPF withdrawals. The proposal came under severe criticism particularly because of the fact that it intended to tax employees at the fag-end of their career, when they needed money the most. The government had justified the ill fated move saying the attempt was to create a pensioned society.