NDA allies seek rollback of tax on withdrawals from EPF

Trade unions, including RSS affiliate BMS, oppose proposal.

March 02, 2016 03:01 am | Updated November 17, 2021 04:41 am IST - NEW DELHI:

A day after the Union Budget was presented, the ruling BJP on Tuesday faced political heat over the decision to tax a certain proportion of the savings in the Employees’ Provident Fund (EPF) at the time of withdrawal.

Its ally, Shiv Sena, and the Biju Janata Dal demanded withdrawal of the tax. The Shiromani Akali Dal (SAD) asked for an increase in the exemption limit.

Trade unions, including the RSS-affiliated Bharatiya Mazdoor Sangh (BMS), have also opposed the proposal.

At the Business Advisory Committee (BAC) meeting of the Lok Sabha, the Shiv Sena and the BJD demanded the rollback of the tax, which they said would hurt the salaried middle class the most. Shiv Sena member of the Rajya Sabha Sanjay Raut told The Hindu that the party had conveyed its views to the government. Tathagat Satpathy of the BJD, a party that has been treading the middle path in Parliament, said he was in favour of the rollback and said he would raise the issue in Parliament.

No tax would accrue for withdrawal of EPF for those with income of Rs. 15,000 and below.

Trade unions plan to lodge a protest with Prime Minister Narendra Modi and Finance Minister Arun Jaitley. “It is disappointing. The government is trying to ‘double tax’ the employees. We are not going to accept this,” BMS general secretary Virjesh Upadhyaya told The Hindu. If the decision was not reversed, the BMS would start a protest.

“The gross salary of an employee is already taxed, then how can the government again tax a component of it that has been kept aside as a saving. We will take up the issue with the government,” he said.

Mr. Jaitley briefed the MPs of the ruling NDA on the budget. The Shiv Sena could not make it to the meeting because of miscommunication. According to those who attended the meeting, Mr. Jaitley spent considerable time, explaining the finer points of the issue. Whether the pressure from the allies and the ideological affiliates will have an effect on the government is to be seen.

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