Union Finance Minister Arun Jaitley’s announcement in the budget to levy tax on the withdrawal of Employee Provident Fund has evoked sharp reactions with opposition parties likening it to anti-middle class measure.
Revenue Secretary Hasmukh Adhia told PTI that PF will not be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 1 will be taxed while principal will continue to be tax exempt.
Meanwhile, an online petition against retirement tax has gone viral on social media with nearly 3,000 people signing the petition. They are seeking urgent and immediate withdrawal of EPF Tax just a day after it was announced in the Budget.
The petition was started by a finance professional from Gurgaon, Vaibhav Aggarwal, and nearly 3,000 people have already supported his appeal to Finance Minister Arun Jaitley to immediately withdraw the decision to tax EPF.
Budget for 2016-17 had sought to impose a retirement tax at the time of final withdrawal on 60 per cent of contributions made after 1 April, 2016, to EPF and other schemes.
“This is a draconian act and will be a killer blow to the already tax burdened salaried class which pays 30 per cent income tax and 30 per cent taxes in indirect form customs, excise, service tax etc,” the petition said.