Roll back tax on returns from PF Investment

Roll back tax on returns from PF Investment

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Venkat Janga started this petition to Smt. Nirmala Sitaraman, Hon. Finance Minister, Government of India. (Finance Minister, Government of India)

To Hon. Finance Minister, Govt of India ,

I am referencing various media reports that have reported that Budget 2021 has restricted the avenues for tax-free returns for middle-class taxpayers. From April 1, returns on investment of more than Rs 2.5 lakh in two of the most popular instruments — provident fund and unit linked insurance plan (ULIP) — will be taxed.

So far, returns on investment of any amount in voluntary provident fund (VPF), along with EPF and ULIP, are tax-free on maturity.

With this amendment, return on investment up to Rs 2.5 lakh in PF will remain tax-free while the return on the portion exceeding that amount will be treated as income in the investor's hand. This portion could be taxed at the rate at which the investor’s income is taxed.

I would like to highlight the fact that this change will deal a severe blow to crores of honest middle-class salaried tax payers who leverage PF contribution as their source of financial  support post retirement. The honest tax payer, especially those working in non-governmental jobs have no other means of financial security such as pension etc and  are at risk of foregoing a substantial portion of their retirement savings year over year as a result of this step.

Keeping this in view , I humbly request you to consider rolling back the proposal to tax income from  PF investments above Rs. 2.5 lakh.

This will restore financial savings ,security and happiness to crores of middle-class Indians.

Thanking you in high anticipation.

- Honest middle-class tax payer 

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