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Tax payers' plea on PF

MUMBAI: The All India Employees Tax Payers' Association has written to the Finance Minister seeking exemption from any levy of tax on their Provident Fund (PF) withdrawals.

According to the association, when the deposit in PF is not fully exempted from IT and only a tax benefit under Section 88 is available, it will be highly improper to add the withdrawal of PF in the total income for taxation.

The association has argued that the PF credits are out of the income already taxed and the withdrawals cannot be put in the category of taxable income through any interpretations of the tax laws.

Commenting on reports of the Government considering a reduction in the interest rates on small savings, the association felt that this would impact employee tax payers adversely.

``The reduction in interest rates on small savings by one per cent a year ago had badly affected tax payers in terms of a reduction in interest rates on their savings and PF investments etc.''

The association has urged the Finance Minister to spare the employee tax payers from double taxation in the form of tax on PF withdrawals as well as reduction in the small savings deposit rates. -- Our Bureau