NEW DELHI: The Union government on Tuesday decided to withdraw its proposal to tax Employees Provident Fund (EPF) withdrawals above 40 per cent of the accumulated corpus. The Opposition claimed credit for forcing Finance Minister Arun Jaitley to do a rethink.
Jaitley announced the decision in a suo motu statement in the Lok Sabha.
The proposal not only had the social media abuzz in protest but triggered threats of protest by the Bharatiya Mazdoor Sangh, the RSS-affiliated trade union.
There were also reports suggesting that Prime Minister Narendra Modi advised the finance minister to not just partially rollback the proposal but to totally scrap it.
Jaitley told the lower house, “In view of the representations received, the government would like to do a comprehensive review of this proposal and therefore I withdraw this proposal.”
West Bengal chief minister Mamata Banerjee was the first off the blocks taking credit for the government's retreat. “It’s a big victory of the people,” she tweeted.
#EPFRollBack A victory for the common people. Happy that we were the first to raise this issue. Good— Mamata Banerjee (@MamataOfficial) March 8, 2016
Congress vice-president Rahul Gandhi also took credit. Rahul had in his election rallies in Assam lambasted the government for offering an amnesty scheme to black money holders while taxing middle-class' retirement benefits.
Finally the Govt was forced to listen to people and roll back the patently unfair tax on EPF (1/2)— Office of RG (@OfficeOfRG) March 8, 2016
But the attempt to tax the safety net of millions of hard working middle class ppl was morally wrong&shows this Govt's anti-ppl mindset(2/2)— Office of RG (@OfficeOfRG) March 8, 2016
Congress media chief Randeep Singh Surjewala said the controversial proposal was withdrawn in the wake of protests by the salaried class.
This looked like a course correction from Gandhi's credit-taking “I and my criticism” line.