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Issue raises stink in NDA

Last Updated 01 March 2016, 20:30 IST

 The disquiet over provident fund withdrawal spilled over to NDA parliamentary party, with some alliance partners arguing that the proposed EPF tax was injustice to employees. Finance Minister Arun Jaitley explained that the restriction was essentially to draw investors towards pooling pension fund.

In his Budget speech on Monday, Jaitley had said the government proposed to tax 60% of withdrawal from the Employees Provident Fund (applicable from April 1) but the announcement led to huge uproar among political parties. RSS-backed Bharatiya Majdoor Sangh and other employees union termed it as “an attack on the working class and a clear case of double taxation.” 

Since then the government has come up with clarifications on the issue and a possibility of a partial roll back was not ruled out.

NDA’s Maharastra-based ally Republican Party of India (Athawale) leader Ramdas Athawale raised his concern at the meeting in Parliament that was chaired by Prime Minister Narendra Modi. 

The finance minister, who had narrated highlights of his Budget to the parliamentarians, clarified the provident fund issue by stating that interest on 60 % withdrawal of PF amount would be taxed and insisted that it was aimed at as an incentive to accumulate pension fund for better retired life, sources present at the meeting said.

It is learnt that Jaitley has informally conveyed to leaders of major political parties what the proposal was all about to sort out confusion prevailing since last afternoon’s announcement in the Lok Sabha.

Dissent

Another NDA partner Shiv Sena’s MP Arvind Sawant did not hide his party’s feeling on the fate of 3.70 crore employees having EPF account.

“The EPF tax is injustice to employees across all sectors and we will oppose this on the floor of the House,” Sawant commented. Staunchly opposing the move, Sawant said that the Modi government has to roll the restriction of provident fund back.

A senior Union minister aware of the developments said that a “clarification will be placed in Parliament to settle the matter.

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(Published 01 March 2016, 20:30 IST)

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