New Delhi, June 16: Having proposed tax exemptions on retirement and long-term savings schemes in the second draft of the Direct Taxes Code (DTC), the Finance Ministry today said the move will not entail any revenue loss.
“EEE (exempt-exempt-exempt) is only for the limited number of saving instruments. It (recommendation) is balanced,” Revenue Secretary Sunil Mitra told PTI today when asked about the rationale for discarding the original proposal of taxing retirement schemes at the time of withdrawal.
The revised draft favors continuance of the EEE (exempt-exempt-exempt) mode for provident funds and pension schemes. Under the EEE mode, the tax exemption is enjoyed at all the three stages–investment, accumulation and withdrawal.
The original DTC draft proposed the EET mode for long-term savings scheme under which tax would be imposed at the time of withdrawal.
–Agencies