Reconsider the budgetary proposal under which a part of the Employees Provident Fund withdrawal will be taxed, Prime Minister Narendra Modi has asked Union Finance Minister Arun Jaitley, according to highly placed sources. an official level meeting was held in PMO on the EPF tax issue two days back, adding that the Finance Minister is likely to make an announcement the exemptions on the floor of House when he replies to budget.

Modi asked Jaitley to revisit the proposed tax on 60% of Employees Provident Fund withdrawal. He asked Jaitley to do away with tax imposed on EPF withdrawal after a massive row over the proposal. Prime Minister Narendra Modi has asked the Finance Minister Arun Jaitley to \"explore ways to review\" the new Budget proposal to tax Employees\' Provident Fund or EPF withdrawals,

The Bharatiya Janata Party (BJP) lauded the Prime Minister for taking up the issue. Jaitley had justified the move to bring in the taxation proposal in the Union Budget 2016-17 and claimed that the proposal would encourage pension savings.

The Congress said that \"corrective measure in budget is always a welcome step\". Congress spokesperson Tom Vadakkan termed it as a \"victory for the common man\".

\"Now we are encouraging people to take pension products so that they are secured. Now we are using taxation as an instrument to incentivising them. We are not taking away their liberty, they are well within their rights to withdraw a 100 percent but it will come with a cost,\" Revenue Secretary Hasmukh Adhia had said.

Mr Jaitley had proposed that after April 1, 2016, 60 per cent of the amount deposited in the EPF account of the employee will be taxable at the time of withdrawal and 40 per cent will be tax free. Earlier, the entire amount was tax free at the time of withdrawal if the employee has completed five years of continuous service.

By Premji