EPF Tax rolled back, but was that the plan all along ? Don’t be fooled, EPF has indeed been made more useless
Netizens today rejoiced as India’s finance minister, Mr. Arun Jaitley announced the rolling back of the regressive tax on EPF withdrawals. However silently EPF has been made a more useless instrument without people even realising that something has changed. Most people are still unaware of the new withdrawal restrictions on EPF, earlier one could withdraw his EPF balance if he/she was unemployed for 2 months.
This has now been retrospectively changed, in what would qualify as bait and switch in any investment scheme and be grossly illegal, the current Modi Govt. has disallowed withdrawals of the EPF balance before the age of 58. So while investing the money if you thought you could have thought that you would use it later to start a business. Guess what ? You cannot now and all this has been done silently outside the budget. Also the decision was announced retrospectively not even giving people a chance to withdraw their savings before the decision came into affect. How’s that for progressive ?
In light of the above there is a conspiracy theory floating around that removing the EPF tax was the plan all along, they announced it since they knew it would act as a smokescreen for the other regressive steps on the EPF. And while we are at theories, here is some practical advice from our very own MoS (Jayant Sinha who is the son of Yashwanth Sinha (nepotism much ?))
“Okay, let’s get the PF issue out of the way. We have received a lot of complaints [about the proposal to tax PF]. Honestly, we were doing them a favour by keeping PF tax-free. If you had taken the same money and put it in a bank fixed deposit, you would first have to pay tax on it, and then pay tax on the interest. We want to keep provident fund and pension fund on the same page.”
Some people say you could have made the National Pension Scheme tax-free.
People in India don’t want to pay taxes.
Easy to say when you dont have to live hand to mouth and pay a gazillion indirect taxes. Instead of widening the tax net on business owners, the current Government again decides to make the life of salaried and service individuals difficult. So much for the promised ‘ache din’.