Rejecting Government’s contention that proposed tax on EPF withdrawals was aimed at moving towards pensioned society, trade unions on Wednesday said retirement fund body EPFO which has over 5 crore subscribers already provides pension under its social security scheme.
“Seeing widest opposition to taxing the EPF withdrawals, Finance Minister Arun Jaitley is now trying to mince his words. EPFO runs a comprehensive scheme which has all components provident fund, pension and insurance,” All India Trade Union Congress Secretary and an EPFO trustee Dl Sachdev said.
“Government are trying to create market for pension products offered by insurance companies in the backdrop of Govt raising FDI in the sector to 49 per cent from 26 per cent,” he added. Jaitley has said the purpose of taxing interest earned on 60% of withdrawals of contribution made after April 1, 2016 was to encourage people to invest in annuity or pension schemes. Continuing to face flak for proposing a tax on employee provident fund withdrawals, FM said he will spell out the final decision on the matter when he replies to the debate on Budget in House.