While announcing the amendments to the finance bill, Sitharaman said the exemption limit for tax-free PF contribution will be raised to Rs 5 lakh, provided the employer has not contributed to the PF corpus.
The change will benefit a few such as those who are working in entities with under 20 workers or cases where the employee’s salary is above the threshold and the employer does not make any contribution, said a consultant with a leading firm.
While several lawmakers demanded a review, the FM defended the move, arguing that it impacts only 1% of the subscribers.
I-T returns: Fines for no Aadhaar, deadline miss
In the Budget, the government had proposed to tax the interest earned on employee’s contribution in excess of Rs 2.5 lakh, prompting calls for a review as several subscribers to the schemes such as EPF use it for enhanced contributions to earn higher tax-free returns.
In the amendments, the government has also mandated a default fee of up to Rs 1,000 for not intimating Aadhaar number while specifying a fine of Rs 5,000 in case tax returns are not filed by the prescribed deadline. However, in case the income is under Rs 5 lakh, the penalty will be capped at Rs 1,000.
Of the amendments moved, significant numbers were related to the Life Insurance Corporation, which is headed for a public issue next fiscal year.
The government has proposed to cap the shareholding of an entity, other than itself, at 5% of LIC’s equity capital apart from aligning several provisions in line with Sebi norms.
Further, the post of chairman will be converted into a non-executive role with the MD and CEO running the operations.