Modi steps in, EPF tax move may be deferred

BUDGET PROPOSAL FM Arun Jaitley expected to clarify stand on Tuesday

A controversial budget proposal to tax provident fund withdrawals may be deferred, with Prime Minister Narendra Modi asking for wider consultations on the move that has turned into a political hot potato.

The deferment, not a rollback, is likely given that Modi is sensitive to the salaried class, top government sources told Hindustan Times, signaling some possible relief for a core support base of the Prime Minister. The proposal is to come into effect from April 1.

The sources said the Prime Minister had studied the representations — made to the government — that had sought a rollback of the tax.

“The Prime Minister … has asked the finance minister to revisit the amendments to the Finance Act and explore all options so that the middle-class Indians can properly invest their savings,” said a top government source.

Finance minister Ar un Jaitley is likely to clarify on the issue in Parliament on Tuesday, sources said.

The government is under pressure from not only the Opposition and labour unions but also some of its allies and the RSS-affiliated Bharatiya Mazdoor Sangh which has slammed the tax proposal as “disgusting”.

A decision to put off the tax rollout would give the Congress and other opposition parties a rallying point to claim victory during the Parliament’s ongoing budget session.

Prez Pranab Mukherjee (left) and PM Narendra Modi at the inaugural session of the National Conference of Women Legislators in New Delhi on Saturday.