The authorities might contemplate proposals for altering norms for taxability of curiosity earnings earned by subscribers of Employees’ Provident Fund Organisation (EPFO), a senior official mentioned. The Finance Ministry will even make clear doubts on the applicability of the brand new tax deduction at supply (TDS) provision concerning advantages or perquisites obtained in a enterprise or career.
“EPFO circular (on TDS) is one issue which is under our consideration. People have requested that it should be on withdrawal basis and not accrual basis. This is under consideration of the government. I can’t say much on that. These are one of the many issues are being discussed regularly,” Joint Secretary within the Finance Ministry Kamlesh C Varshney mentioned on Wednesday.
“This is one area where nobody was paying taxes despite receiving benefits and perquisites in the course of business and profession … we are going to clarify the practical difficulties before July 1,” he mentioned, interacting with members of business physique Assocham.
The Budget FY23 launched taxing curiosity earnings on contributions made to the EPF past Rs 2.5 lakh (for personal workers) and Rs 5 lakh (for presidency workers). It additionally introduced in a brand new Section 194R within the Income-Tax Act that requires deduction of tax at supply on the fee of 10 per cent, by any individual, offering any profit or perquisite, exceeding Rs 20,000 in a yr to a resident, arising from the enterprise or career of such resident. The provision comes into impact from July 1.
