With the rollback of budget announcements, EPF will continue to be an attractive investment option with an EEE scheme.
Facing a strong backlash from salaried taxpayers over its proposal to tax withdrawal from EPF, the government has decided to roll back the Budget proposal.
Her statement came soon after union Finance Minister Arun Jaitley withdrew his Budget proposal to tax employees' provident fund (EPF) at withdrawal.
For former ‘king of good times’ Vijay Mallya, it is literally pay back time. The debt recovery tribunal has barred him from withdrawing $75 million exit payment from Diageo till the loan default case filed by SBI is settled
The proposal to switch from EPF to NPS was announced in last year’s Budget. This year’s Budget has extended a one-time tax exemption to such switching.
Only this time the govt may be unfairly targeted because switching rules it has framed for EPF and NPS are quite flexible and subscriber-friendly.
Under the NPS, the subscriber is eligible to withdraw 60% of the corpus. The remaining 40 per cent of the accumulated fund goes towards annuity.
The government is under pressure to roll back the proposed tax on Provident Fund. Here’s what you can do if it comes into effect.
The tax on the EPF is proposed only on the corpus created after April 2016. So, it will have a greater impact on young subscribers.
"The entire thing happened not because of any illogicality in the step but due to the communication gap," Adhia said at an interaction on Budget.
Following a backlash from employees union and political parties, Jaitley has already signalled willingness to reconsider the proposal.
Government will notify categories of employees who will be excluded from the controversial tax proposal on provident fund withdrawals.
Older subscribers to employees’ provident fund who have periodically dipped into their corpus will also see a big chunk of their savings go into tax.
Congress Vice President Rahul Gandhi today demanded that PM Narendra Modi roll back the proposal for taxing employee provident fund withdrawals.
Experts have advised companies to consider restructuring the compensation package, by allowing employees to limit their PF contributions within the statutory caps.
Jaitley proposed in his Budget that 40% of withdrawals from National Pension Scheme (NPS) would be tax free and sought to bring EPF on a par with this.
Vaibhav's Change.org petition has been shared widely on Twitter and Facebook and continues to gather more signatures rapidly.
EPF is still attractive and government savings bonds and mutual funds are likely to offer better returns going ahead.
While there are indications that the govt may alter some of the elements of the proposal, it doesn't appear willing to climb down completely.
The government’s proposal to tax a portion of withdrawals from recognised provident funds drew strong criticism from major opposition parties and trade unions
While the Budget has introduced tax parity for all pension products, it has removed several advantages enjoyed by EPF investors.
At present, social security schemes run by retirement fund body EPFO are tax free EEE scheme under which deposits, accrual of interest and withdrawals are tax free.
The survey has suggested that employees could be allowed to choose whether or not to save 12 per cent of their salary into EPF or keep it as take home pay.
The government had to roll back the decision and provided 8.8 per cent rate of interest on EPF deposit for last fiscal following protests by trade unions.
The interest rates were already linked to the government bond yields and were revised once in a year. Now they will be revised every quarter.
For someone looking to save for retirement it helps to understand what each pillar is and how they are going to impact their retirement savings.
EPF Amendment Bill seeks to provide an option to EPFO subscribers of choosing between EPF and New Pension System.
NPS investors split their corpus across three different classes of funds so ET Wealth looked at blended returns of different types of investors.
Rules of Employees Provident Fund have been changed to make the scheme more user-friendly. Read this to know the changes and what they mean for you.
As many as 12.14 lakh new member had joined the Employees' State Insurance Scheme in September, stated the report of Central Statistics Office.
Ahmedabad based couple get a combined monthly salary of Rs 1.64 lakh. Their goals include creating an emergency fund, buying an office, kid's education and wedding.
Does EPFO have sufficient surplus left for honouring this year's interest rate? The jury's still out.
But before you get down to choosing a tax saving investment you should probably first calculate how much you need to invest to save tax.
From urban working women to rural homemakers, Finance Minister Arun Jaitley rooted for the ladies.
The proposal to provide an option to choose between EPF and NPS for over 5 crore subscribers of the retirement fund body EPFO has been sent to the Law Ministry for vetting.
Hyderabad-based Joshi's goals include saving for emergencies, taking a vacation, saving for the child’s education and wedding, and retirement.
Some flexi-features of long-term instruments can help meet short-term needs. Here is a look at few of the available options.
The finance ministry had ratified 8.55 per cent rate of interest on EPF for the last fiscal. But it could not be implemented because of model code of conduct for Karnataka elections.
At a meeting, Shah gave assurance to leaders of the central trade union on a host of issues related to workers, BMS said in a statement.
The move was proposed under the amendments to the Employees' Provident Fund & Miscellaneous Provisions Act.
ET reached out to 25 finance professionals, including mutual fund managers, investment analysts and independent financial advisers, for their views.
According to the revised definition of wages, all emoluments or remunerations including all allowances would be payable to an employee in cash.
The government is likely to introduce a bill to amend the EPF & MP Act in the budget session of Parliament with the objective of bringing more workers under the social security benefit among other things.
Retirement fund body EPFO is expected to keep interest rate unchanged at 8.65 per cent on provident funds for its about 5 crore members for 2017-18.
Such a move would benefit at least 4 million people and cost the Centre a minimum Rs 3,000 crore annually if implemented, the person said.
An individual taxable at 30% can save Rs 45,000 if he claims Rs 1.5 lakh as deduction under section 80C.
Build an emergency corpus for your financial goals well in advance. Invest in balanced funds for down payments and EMIs can be funded from your salary.
Active NPS managers follow a multi-cap strategy to invest in stocks outside the Nifty and hence underperform when the market is biased towards large-caps.
Government plans to amend the EPF Act to bring more workers under the ambit of EPFO by reducing the threshold for coverage of firms to 10 workers, Lok Sabha was informed.
It is a voluntary and contributory pension scheme, under which the subscriber would receive a minimum assured pension of Rs 3,000 per month after attaining the age of 60 years.
Replying to another question, the Minister said that at present there is no proposal to provide any minimum wage pension to all workers of unorganised sector.
As per Budget, individuals with annual income up to Rs 5 lakh will get full tax rebate under section 87A.
Interim Budget 2019 could offer individual taxpayers certain benefits and tax exemptions, which will have a positive impact on personal savings, retirement benefits and so on.
As per the limits fixed by FinMin and the by the Ministry of Labour and Employment, EPFO can go up to an extent of 15% of the investible funds but we had to be very cautious.
Investment would begin with 1 per cent of EPF- related money which could eventually go up to 15 per cent, said Union Minister of State for Labour Bandaru Dattatreya.
Here are articles on how to calculate your PF balance, how to check your EPF balance, benefits of linking your EPF to your Aadhaar and so on.
Aritro Ray works in private sector and gets a monthly salary of Rs 1.65 lakh. His goals include saving for emergencies, future child’s education and retirement.
Much of what appears in the Congress manifesto has been already announced by party president Rahul Gandhi.
Aggressive saving and investment means Pune-based Agarwals will have a smooth financial journey.
EPFO has introduced several measures to bring down the claims settlement period and aims for the settlement of claims within 5 days.
With the introduction of the Universal Account Number, it is possible to consolidate multiple accounts into one single account for each EPFO member.
Retirement is not the same anymore. Not saving enough while there's time could leave you to a dreadful fate.
A labour ministry statement said 'View Pension Passbook' service for pensioners will be available through Umang app.
The Finance Ministry is now reconsidering the Budget provision to impose TDS on premature provident fund withdrawals of Rs 30,000 or more.
Supreme Court ruled in favour of employees' right to raise their contributions to the pension fund without imposing any cut-off date for eligibility.
Can all EPFO members get higher pension if they opt to raise their EPS contribution? Yes, all those who joined before Sept 1, 2014 can contribute on their full pay.
Some experts say investors can look at calibrating their Section 80C savings towards the Voluntary Provident Fund rather than PPF that currently fetches 8.1%.
The backpedalling follows the uproar sparked by the finance ministry scaling down the 8.8% recommended by the CBT of the Employees’ Provident Fund Organisation (EPFO).
Successive governments are unwilling to carry out even a simple income tax reform which would link taxation threshold to inflation.
Over 10,000 workers in Hebbugodi vandalized the Hebbagodi police station and set fire to vehicles, including police and public transport vehicles.
It's always better to plan your tax saving investments in advance than make the wrong moves at the fag end of the financial year.
According to an analysis by the EPFO, there are 1,550 private PF trusts having total subscribers of over 82 lakh employees. These trusts are managing around Rs 3 lakh crore corpus.
8.33% is contributed towards Employees Pension Scheme (EPS), with a cap of Rs 1,250 or 8.33% of Rs 15,000.
The proposal is part of the bill to make comprehensive amendments to the Employees' Provident Funds and Miscellaneous Provisions Act 1952.
One can check the EPF balance anytime from the comfort of their home or office using these routes - online, Umang App, SMS, or by giving a missed call.
At present, in case of unemployment, a subscriber can withdraw his or her funds after two months of unemployment and settle the account in one go.
Depending on the financial plan, risk appetite based asset allocation for many may have a debt allocation.
If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
The Centre is trying to reintroduce a proposal, which will result in higher transfer to the provident fund but will reduce your take-home salary.
This year in ITR-1, tax-exempt incomes have to be reported in the tab, 'Computation of income and tax'.
Bhartiya Mazdoor Sangh has threatened to go a nationwide protest on September 6.
Although it is still not mandatory for one to link their UAN to Aadhaar, doing so can make life simpler and the claims settlement process can be a breeze.
Every employee in the organised sector contributes 12% of basic salary and dearness allowance to EPF. The employer makes a matching contribution.
"People need to build a bucket for retirement and we need to ensure that the bucket remains tax free"
"Education, experience and simplification needed to change people's investment habits and make them invest in pension products"
"The intent behind the EPF tax was not questionable but there were components in it that were not accepted"
Trade unions, including RSS-backed Bharatiya Mazdoor Sangh, BJP MPs, along with Congress and other opposition parties have joined the protest.
Shiv Sena and Shiromani Akali Dal as well as the trade unions, including RSS -affiliated Bharatiaya Mazdoor Sangh, hoped for a rollback of EPF tax.
"The revenue department had considered various aspects of the National Pension Scheme and Employee Provident Fund Organisation (EPFO)", he said.
Salaried individuals, many of whom opted to save through additional contribution to their VPF, could now shift to tax-free bonds or debt mutual funds.
The finance ministry clarified on Tuesday that 60% of the contributions made from April 1, 2016 and the interest they earn will be taxed at the time of withdrawal.
According to sources FM Arun Jaitley will formally calm the nerves over taxation on withdrawal of EPF corpus,in Parliament during a discussion on the budget.
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