New Delhi, June 15: In a sigh of relief to the salaried class, the government today dropped the contentious proposal to tax provident and pension funds withdrawls and decided to continue with the major tax incentive on housing loans.
In the revised Draft Taxes Code (DTC), which will replace the 50-year-old Income Tax Act, the finance ministry decided to drop its earlier proposal to tax the Government Provident Fund or the Public Provident Fund withdrawls.
“In the absence of adequate social security benefits, taxation of withdrawls from retirement benefits would be harsh,” says the revised DTC.
It also said that the proposal to bring in perquisities like government accomodation to be part of salary has also been dropped.
–Agencies