22 September, 2020

The Golden Goose

Why the proposal to tax the EPF is bad governance

Photo by Amit Haralkar
The Golden Goose
outlookindia.com
2016-03-08T11:45:07+05:30

Dear Finance Minister,

Your budget this year is laudable for the balance it has struck. As a salaried individual, I am glad you have not touched the income-tax rates and income-tax slabs. However, it hurts when in the guise of making me bel­ieve that your intent was to help us move towards a pensioned society, you have actually created a situation where I am chronically worried about my future.

I don’t understand the wisdom of bringing the only soc­ial security instrument of some sort under the tax net, that too at the time of withdrawal, when the retiree most needs the money s/he has saved through the working years. By making only 40 per cent of EPF withdrawals tax-free, unlike the earlier 100 per cent, you have indicated the intent to tap into my pension. The big leap between the budget announcement and now (March 2) are different voices coming from the ministry and the revenue secretary over the treatment of taxation on the EPF. While there is a talk of rollback of this provision, you have indicated your intent to tax the retirement...

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