Centre withdraws proposal on taxation of pension fund

PTI2_26_2016_000209B Finance Minister Arun Jaitley

Finance Minister Arun Jaitley on Tuesday announced in parliament the withdrawal of a budget proposal to tax pension fund withdrawals, following an outcry by salaried workers.

Last month, Jaitley proposed taxing lump-sum withdrawals exceeding 40 percent of an individual's retirement pot in the Employees' Provident Fund (EPF), unless the sum is reinvested in a pension product such as an annuity.

At present, withdrawal from the EPF is entirely tax-free.

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