The Congress and the Communist Party of India (Marxist) plan to move amendments in the Lok Sabha against the Finance Ministry’s decision to tax 60% of the Employee Provident Fund corpus amount at the time of withdrawal. According to The Indian Express, senior Congress leader Anand Sharma confirmed the party’s decision to challenge the Budget provision, saying the decision was “insensitive on the part of the government”. CPI(M)’s Mohammad Salim said his party would do that same.
Leaders of the Trinamool Congress have also criticised the decision. Party MP Sudip Bandopadhyay said the Provident Fund is the “last asset of salaried people” and that “this should be withdrawn in totality without getting into the technicalities” of 60% and 40%. Bandhopadyay raised the issue in the House on Wednesday, after which Finance Minister Arun Jaitley said he would clarify the issue at a later time.
The government maintained that it will not roll back the tax, though it faces increasing pressure to do so. Labour Minister Bandaru Dattatreya said they were discussing the matter with all stakeholders.
On Tuesday, in response to an outcry against the decision to tax the once tax-free EPF, Revenue Secretary Hasmukh Adhia had said that the tax would only apply to the interest accrued and not the corpus amount. However, the centre had quickly clarified saying the original decision to tax the corpus still stood, but that it only applied to the “highly paid”. By this they meant people who earned more than Rs 15,000 a month.
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