Roll back of 60% taxation of EPF/NPS withdrawal announced

Roll back of 60% taxation of EPF/NPS withdrawal announced

The Finance Bill, 2016 (Budget 2016-17) had proposed income tax on 60% of the total corpus of Recognised Provident Funds (including EPF) and NPS at the time of withdrawal.

However after severe criticism of the Government, the Finance Minister Shri Arun Jaitley has today in Lok Sabha announced the much anticipated roll back of the proposal as under

“In the present reform, the policy objective is not to get more revenue but to encourage people to join the pension scheme. There are various other suggestions received which can also achieve the same policy objective of encouraging people to join the pension scheme.

In view of the representation received, the Government would like to do a comprehensive review of the proposal and therefore I withdraw the proposal in paragraph 138 and 139 of my budget speech.

The proposal of 40% exemption given to NPS subscriber at the time of withdrawal remains.”

• Notice issued u/s 143(2) prior to filing of return of income assessee is invalid
• Order u/s 148A(d) passed against non-existent entity is bad in eyes of law – High Court
• Tax authorities not bound with provisions of section 44AE once assessee waived option
• Whether seized document is incriminating or not is a findings of fact – High Court
• Interest earned on borrowed funds/unutilized capital subsidy is capital receipts – High Court