EPF Tax `Rollback’ to Precede Budget Talks

SETTLING IT ONCE AND FOR ALL Jaitley to make suo motu statement on EPF tax proposals immediately after the Question Hour in Lok Sabha today
Finance Minister Arun Jaitley is all set to make a suo motu statement regarding the controversy surrounding his EPF proposals in Lok Sabha on Tuesday without even waiting for start of the discussion on Budget in Parliament.

The updated list of Lok Sabha’s business for Tuesday , in fact, has already listed Jaitley to make his statement regarding “the issue of tax proposals for EPFSuperannuation Fund“ after the Question Hour gets over at noon.

It has been listed under `Statement By Minister’ category which does not entail discussion and also provides a flexibility to the minister to lay down his clarifying statement on the table of the Lok Sabha without even reading. However, there is a likelihood that FM will read out the statement and the opposition may demand the Speaker to allow a brief discussion on this issue. The turn of events will depend upon the situation prevailing in the House on Tuesday .

It should be noted that Labour Ministry and trade unions, even those affiliated with the RSS, had red-flagged the move of FM which sought to tax 60% of the EPF corpus withdrawal at the time of retire ment. While opposition led by Congress vice-president Rahu Gandhi has demanded a complete roll back of the proposal, a strong section within the government, too expressed its concern over the move citing that it will annoy party’s core supportbase among salaried private sector workers.

This forced Prime Minister’s office to get Labour Ministry and Finance Ministry to sit together to work out a solution. Top government sources confided that the initial solution worked out the day after the Budget was that only the returns on 60% of the EPF corpus be taxed instead of the entire 60% of corpus during withdrawal. However, the trade unions and even labour ministry were learnt to have expressed their dissatisfaction over this partial rollback and demanded total rollback of the proposed tax. It was in this wake that PMO got the Labour and Finance Ministries to work out an amicable solution that addressed the interests of the private sector workers.

Jaitley, consequently , is expected to provide the reasoning of his proposed move and also offer the change, which is expected to be a total rollback.

The Lok Sabha, otherwise, is scheduled to witness introduction of the Enemy Property (Amendment and Validation) Bill, 2016 to replace the Ordinance and discussion on the Railways Budget.

Source – The Economic Times