Withdraw Tax Proposal on EPF Has Been Announced by Union Government [ Current News (Concise) ]
The Employee Provident Fund (EPF) withdrawals tax is removed as recently announced by Union Finance Ministry Arun Jaitley in the Lok Sabha clarifying NDA government’s stand on the issue. But yet tax National Pension Scheme (NPS) withdrawals have not changed by government.
- Union Finance Minister Arun Jaitley had projected to tax EPF and NPS withdrawals will came in effect from 1 April 2016 in the Union Budget 2016 - 17.
- According to this announcement 60 % of the amount of deposited in EPF account of the employee would be taxed at the time of withdrawal and remaining 40 % would be tax free.
- But if the employee re-invests 60 percent of the EPF in a pension or annuity fund budget proposal had provided tax exemption.
About Employee Provident Fund (EPF)
- The Employee Provident Fund (EPF) is a retirement benefit applicable only to salaried employees.
- In this both the employee and employer contribute fixed amount (percent) of the former’s basic salary amount each month.
- This percentage is pre-set by the government.
- And now the complete EPF amount is tax free at the time of withdrawal if the employee has finished five years of constant service.
- Published/Last Modified on: March 9, 2016