FINANCE MINISTER Arun Jaitley’s proposal to tax a part of the Employee Provident Fund (EPF) withdrawal has not gone well with the salaried class and workers’ unions. The Budget has proposed to tax 60 per cent of withdrawal amount from next week. Many called it a retrograde step — one that will hit their corpus badly. This is being seen as second and biggest blow to self-employed professional and salaried class in a week.
“In case of superannuation funds and provident funds, including EPF, the same norm of 40 per cent of corpus to be tax free will apply to corpus created out of contributions made on or from April 1, 2016,” Jaitley said.
Chandrashekhar Iyer, an investment consultant, said the move will affect the salaried class in the country. “All these years, the withdrawals from EPF had been completely tax free. The EPF has enjoyed exempt status. If the proposal of the Finance Ministry gets approval, then salaried class will have to pay tax on 60 per cent of their withdrawal amount,” he said.
Sachin Mengale of Bharatiya Mazdoor Sangh (BMS), Pune unit, called it a step that will hit the common man very hard. “The salaried class is already paying the professional tax. Where was the need for the government to tax them further ?” he said. BMS said EPF is the salaries class’ biggest saving and hope.
Sunil Pataskar, secretary of the Hindustan Antibiotics Mazdoor Sangh, said the move to tax EPF was a big blow for the salaried class which relies heavily on its saving in the fund. “The EPF is like an oxygen for the salaried. If the government wants to disrupt the oxygen supply, then the common man is going to be in trouble,” he said. Pataskar said if the FM goes ahead with his proposal, they would undertake a signature drive to oppose it and submit it to Union Minister Prakash Javadekar with the hope that it would be forwarded to the Prime Minister.
Pravin R, a marketing executive, said,”I thought the government was talking of bringing in acche din…but it seems to be doing exactly the opposite.”