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Facing a strong backlash from salaried tax payers over its proposal to tax withdrawal from retirement funds, the government has decided to withdraw the budget proposal that sought to create a pensioned society by discouraging full withdrawal.
There is at present no tax on withdrawal from employee provident funds and other superannuation funds. In the recent budget for FY17, the government has proposed that withdrawal in excess of 40% of the accumulated corpus will be taxed.
The government ministers have been flooded on social media to withdraw the proposed tax.
A day after the budget government had issued a statement clarifying the intent behind the proposal and its intent and its limited impact, but the criticism continued prompting the government to withdraw the tax. (Source - Economic Times)
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