Dear Finance Minister – We Want Our Money whenever We Need. WHY wait till 58?
How will you react if someone asks you to pay tax on the money that you have in your pocket? Believe me, that is not a hypothetical question to ask anymore after our finance minister announced Indian Budget 2016. That is actually going to happen from April 1, 2016, the heartless current Indian Government and our finance minister has forced that unprecedented tax on you. Now your PPF and EPF are forcefully included in the taxable money by our finance minister. Isn’t that an alleged dacoity by the government on your hard-earned money over the years? Instead of giving relief to the fellow citizens who are suffering the highest cost living condition today, the government has come down to this level.
Dear Finance Minister : The already tax burdened salaried class which pays 30% income tax + 30% taxes in indirect form i.e Custom duty & Octroi, Excise Duty, Service Tax, VAT, Stamp Duty, Registration Fees, Property Tax, Road Tax, Education Cess, Surcharge, Gift Tax, Wealth Tax, Toll Tax, Capital Gains Tax, Securities Transaction Tax, Perquisite Tax, Professional Tax, Municipal Tax, Entertainment Tax, Transfer Tax etc. WHY burden service class by levying tax on 60% of their EPF balance?
I raise my voice against government’s budget proposal of levying tax on 60% of EPF balance (accumulated from 1.4.16) at the time of withdrawal on retirement. We feel sorry to say that Government and you as a finance minister has wrongfully considered EPF on par with National Pension System. There is basic difference between both – EPF is mostly compulsory contribution and employee usually doesn’t have option to opt out and thus stay invested in the hope that its retirement savings fund which can be useful in his old age and hopes to receive lump-sum amount for realizing his unfulfilled dreams. Whereas in the case of National Pension System – NPS, a person from day 1 thinks of regular annuity/ income post retirement and is voluntary. Here the government wishes to convert the above Employees’ Provident Fund balance of 60% to NPS forcefully by making it taxable. 60% of EPF corpus would be taxed at time of withdrawal, which was tax exempt earlier. It means if your probable EPF during retirement is 1 crore then you will pay 18 lakh as tax.
An employee starts with a basic salary of Rs. 20,000 at 25 years and works till 60 years. Every year, on an average, he gets a 5% increment. He contributes 12% of his basic salary towards PF which is matched equally by one’s company, (EPF contribution is 3.67%, EPS 8.67%). Over the course of 35 years of his working life, his total contribution is Rs. 26.01 Lakhs. Of course, his company makes a contribution of Rs. 7.955 Lakhs, total contribution of Rs 33.967 lakh. And this amount grows into – Rs. 1.38 Crores at the time of his retirement!
If you are definitely not going to wait till 58 Years sign this petition here started by Vaibhav Aggarwal.
Does our finance minister Shri Arun Jaitley realize that for 90% of honest taxpayers, including yours truly, EPF is the only source of income or corpus post retirement? Does he realize that 90% of honest taxpayers pay for the higher education, marriage of their kids or buy buy a home after retirement through this instrument?
We want our money whenever we need it and that too tax free. Who is going to wait till 58?