PM urged not to tax PF at retirement as its backbone of salaried middle class

Prime Minister Narendera Modi had to intervene in the Provident Fund withdrawal matter following the hue and cry raised by the salaried class which wanted the non-taxable nature of the PF to continue at the time of retirement. The current exercise in the Finance Ministry is to either total rollback of the PF taxation or lower percentage of taxation of PF withdrawals. Finance Minister Arun Jaitley had proposed 60% tax on PF withdrawals, without hinting whether it would be for the emergency withdrawals such as major operation or sister or daughter's marriage or total withdrawal after one's retirement. In either case, Jaitley, for all his financial acumen, has not understood the providential nature of the fund. Else he would not have proposed such a tax in the first place. It is not too late that the government should rollback the PF tax. In any case, there should be no tax of `provident' fund as such. What the tax can be limited to is for half-way withdrawals, which is not always done for genuine purposes. As a deterrent against midway withdrawals, the tax can be proposed as a deterrent. In fact, some well-meaning companies in fact try to dissuade their employees from withdrawing PF before retirement. If the Finance Minister's intent is good, the pupose will be served better. Without understanding the nature of `provident' fund, which is actually a life sustainer for the retired employee, if you tax the salaried class, you would be hitting at the middle and lower middle classes in the country, who form the bulk of people. The revised PF provision was to be made on Friday itself, but had to be postponed to Tuesday following the passing of former Speaker PA Sangma. Leading lawyers and those indulging in cricket funds would not be able to understand the nature of `provident' fund, the backbone of the middle class.