New Delhi, Mar 1: Facing huge public outcry over announcement in Union Budget that Public Provident Fund (PPF) money will be taxable, Centre on Tuesday clarified the same.
The government on Tuesday announced that PPF will not be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 1 will be taxed while principal will continue to be tax exempt.
Seeking to dispel fears of the salaried class, Revenue Secretary Hasmukh Adhia said that principal amount to remain tax exempted. "Only interest accrued on 60% contribution to EPF after April 1, 2016 will be taxed", Adhia said.
He further said, "Small salaried employees with up to Rs 15,000/month income will be kept out of purview of proposed taxation of EPF".Earlier, while presenting Budget in Parliament, Finance Minister Arun Jaitley announced that PPF amount will be taxable. The move was severely criticized by people from all section of the society.
"In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40 per cent of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 1.4.2016," Budget document said.