EPF tax: How the decision will affect Amar, Akbar and Antony
So what is this new EPF tax? Does it affect those in their mid-career? Does it affect the person who will retire in another year?
Finance minister Arun Jaitley said on Monday that 60% of withdrawal from the provident fund account will be taxed on contributions to be made after April 1.
However, it is not clear whether only the interest will be taxed or the whole corpus itself.
Before the govt could address the confusion, a Change.org petition asking the ministry to withdraw the decision went viral with over one lakh signatures.
What is this new EPF tax? Does it affect those in their mid-career? Does it affect the ones who will retire next year?
To answer these questions, we have analysed the effect of EPF tax for the following three age groups.
Assumptions
* Employee gets a salary rise of 8% every year.
* Employee plans to retire at the age of 58.
Age group 1
Age group 2
Age group 3
Graphic: Vignesh Radhakrishnan