Middle-Class Heartburn over EPF Tax Forces Govt to Clarify

After EPF googly and consequent backlash, govt forced to clarify.

Clarification or partial rollback? (Photo: Reuters)

Will your contributions the Employee Provident Fund (EPF) be taxable? When that became a matter of intense speculation on Monday following FM Arun Jaitley’s Budget speech, the government was forced to ‘clarify’.

Revenue Secretary Hasmukh Adhia confirmed:

1. Only interest accrued on 60 percent contribution to EPF after 1 April 2016 will be taxed; principal amount to remain tax exempt.

2. Small salaried employees with up to Rs 15,000/month income will be kept out of purview of proposed taxation of EPF.

3. All PPF contributions will continue to remain tax emempt, no tax on withdrawal of PPF.

#RollbackEPF

The decision that would have affected nearly six crore people led to much heartburn on social media with #RollbackEPF among the top Twitter trends this morning.