EPF tax rollback: Protests force Arun Jaitley to withdraw crucial Budget 2016 proposal

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5. Budget 2016: The 0.5 per cent Swachh Bharat cess on all taxable services, introduced last November to fund cleanliness drive of the government, will garner Rs 10,000 crore next fiscal, as compared to Rs 3,750 crore this year. The only place where the government will lose revenue is in converting the specific rate of Rs 4,500/tonnes of oil development cess into an ad-valorem rate of 20 per cent. At USD 35 per barrel oil price, the 20 per cent cess translates into Rs 3,500/tonne. On this account, the government will get Rs 10,303 crore next fiscal as compared to Rs 14,962 crore this year.

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EPF tax rollback: Jaitley had in his Budget for 2016-17 proposed to tax withdrawal of 60 per cent of accumulations in the employee provident fund after April 1, 2016. This was criticised by all employees unions as well as political parties. "In view of representations received, the government would like to do a comprehensive review of this proposal and therefore I withdraw the proposal," Jaitley said in a suo motu statement in Lok Sabha. (Reuters photo) <br><a href="https://www.financialexpress.com/article/budget-2016/fm-arun-jaitley-withdraws-controversial-budget-2016-epf-tax-proposal-nps-tax-exemption-to-remain/220780/"><strong>Budget 2016 EPF tax proposal withdrawn; NPS tax exemption to remain</strong></a></br>

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EPF tax rollback: Arun Jaitley however stated that 40 per cent exemption given to National Pension Scheme (NPS) subscriber at the time of withdrawal remains. In his budget proposal, Jaitley had proposed that 40 per cent of the EPF withdrawals would be tax exempt and the remaining 60 per cent would also get the same treatment provided the amount is invested in pension annuity schemes. (AP)<br><a href="https://www.financialexpress.com/article/budget-2016/fm-arun-jaitley-withdraws-controversial-budget-2016-epf-tax-proposal-nps-tax-exemption-to-remain/220780/"><strong>Budget 2016 EPF tax proposal withdrawn; NPS tax exemption to remain</strong></a></br>

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2. Arun Jaitley: "We framed the anti-black money law and asked people to disclose their black money and pay 60 percent tax instead of 30 percent plus penalty. In HSBC accounts details, while the UPA government did nothing, we assessed the accounts and filed criminal prosecution against each person. We also assessed and filed prosecutions against holders of Liechtenstein accounts. In Panama (Papers), there are two kinds of people. Few people have kept money outside the country with RBI's consent and few without it. Notices have been sent to all illegal account holders and inquiries are on".(AP)

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EPF tax rollback: The proposal would not have impacted 3.26 crore EPFO subscribers drawing statutory wage of up to Rs 15,000 per month. Employees Provident Fund Organisation (EPFO) has a total subscriber base of 3.7 crore. (Express photo)

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EPF tax rollback: Congress staged protests in many places seeking immediate reversal of the Centre's proposal to tax 60 per cent of Employees' Provident Fund (EPF) at the time of withdrawal and warned of escalating pressure if the demand was not met. "The move to tax EPF will be a terrible blow to six crore employees covered under the EPF Act… The BJP-led central government is playing with their future. The proposal must be rolled back immediately," Delhi Congress chief Ajay Maken said at the protest at Jantar Mantar. (Reuters photo)

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EPF tax rollback: According to the budget proposal, an employee will have to invest 60 per cent of the EPF in annuity "as per wishes of government" if he does not want to pay tax on the amount he receives at the time of retirement. Congress claimed the move was aimed at helping insurance companies, particularly private ones. (Reuters photo)

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EPF tax rollback: "Salaried people depend on their salaries for their living and on retirement they depend on their EPF savings for their daughter's marriage and for housing, and if tax is levied on EPF, it would be a big blow to salaried class," Maken said. (PTI photo)<br><a href="https://www.financialexpress.com/article/budget-2016/fm-arun-jaitley-withdraws-controversial-budget-2016-epf-tax-proposal-nps-tax-exemption-to-remain/220780/"><strong>Budget 2016 EPF tax proposal withdrawn; NPS tax exemption to remain</strong></a></br>

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EPF tax rollback: The Union Budget for 2016-17 proposed taxing 60 per cent of withdrawals from the Employee Provident Fund (EPF) on contributions to be made after April 1, 2016 unless the sum is reinvested in pension product such as an annuity. (PTI photo)

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6. Income tax exemption limit: 5-Yr post office time deposit (POTD) scheme – POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two years, three years and five years, only 5-Yr post-office time deposit (POTD) qualifies for tax saving under section 80C. The Interest is entirely taxable.