Budget 2016 - news & discussions

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member_29350
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Re: Budget 2016 - news & discussions

Postby member_29350 » 01 Mar 2016 21:30

SwamyG wrote:Was this posted here?
PPF is on the exemption list, only EPF intetest to attract tax.
http://m.economictimes.com/wealth/tax/b ... 206058.cms


Yes but you(not you specifically) miss the point.

Was tax on EPF there originally? No. Did anyone want it to be taxed? No. pt vii of Jayant Sinha's clarification is very clear. out 3.7Cr base, 60L are HNW contributors apparently. Since these rich people don't know about investments and annuities, he wants them to take an annuity OR have 60% of the corpus interest taxed.

Pray tell, since when did GOI give investment advice to 'rich' people?

So a target base is taxed; everything else is hogwash in the litany of lies and excuses

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Re: Budget 2016 - news & discussions

Postby member_23061 » 01 Mar 2016 21:51

Why annuity sucks in India as things stand

http://articles.economictimes.indiatime ... d-deposits

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Re: Budget 2016 - news & discussions

Postby Picklu » 01 Mar 2016 22:26

^^

1. As I mentioned, the problem is not the provision of taxing 60% of the corpus if taken in lumpsum. The problem is the absence of good annuity in India so far. Investing (at least a large percentage) in a safe and secured annuity for retired life(>55 years of age) is best practice as far as financial planning goes. Not just in India but all over the world including the OECD countries. Almost all superannuation products shift a large percentage to debt and gilt funds by default based on the age profile of the investor - lower return but lower risk as well. So, the govt push towards the best practice is not the problem. And make no mistake, it is absolutely the job of the govt to nudge the society towards better behavior - be it censor board, school board or tobaco, alcohol and gun policies. Not sure why this push towards annuity should be seen as any less revolutionary financial reform than JAM.
2. Even considering the bad returns of the current annuities, trust me when I say this that 90% of retirees won't be able to beat the return of those annuities available in India. It is like saying return of bank FD is very poor compared to stock market. Yes, absolutely. How many of those 55 year olds will be able to play the market and beat even the yield of the debt funds? Anyone who has maintained fund in FDs etc will know the hustle to accounting, taxation and renewal etc and beyond a point it becomes tough for aged retires in all practical purpose. For a 75 years old, going to the bank to file form 15h etc are not a joke.
3. Yes, people will not like to give up the option and forced to go to annuity. Nobody likes their options to narrow from 100% to 40%. But in the larger interest of the society, a safe and secure but comparatively meager steady income above 58 years is good overall.
4. I do trust Jet Li to again work on the other part of the strategy i.e. to clean up the annuity offerings in Indian market. Just like people accepted that a part of their salary would be deducted in PF without mucho protest, understanding the good intention of the govt behind that move, the people will accept annuity once there are better offerings in the market.
5. I personally believe a large part of the mischief is being made by MSM (and offcourse the current govt is not helping with proper communication) by projecting it as a govt money making scheme by taxing life savings of aam aadmi instead of projecting it as a responsible financial behavior towards steady income in retired life. The 40% of the corpus is enough to pay for kids marriage, house loan closure, medical insurance top up and so on and so forth. Kids education should move towards education loan. And none has stopped people to have savings outside various PF schemes etc. If the oldies are so inclined, they can save up and start playing the stock market using additional savings. Only have a safety net for the poor spouse at least if not for yourself.

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Re: Budget 2016 - news & discussions

Postby prahaar » 01 Mar 2016 23:44

One cannot blame Europe whose freedom of choice is being curtailed. Those in Europe already know that pension contributions are mandatory and also can neither be claimed as lump sum nor can pension be claimed at an arbitrary age.

The anger is because something important is being taken without any compensation.

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Re: Budget 2016 - news & discussions

Postby KJo » 01 Mar 2016 23:54

asgkhan wrote:I hope congress comes back to power !! This is betrayal of the highest order.

Twitter is abuzz with the scorn heaped on this buffoon and smooth talking Jaitley shmuck !!!

Good luck on 2019 elections.

Dear Namo,

Nobody gives a phuck about your achivements such as
100 % electrification
Swach Bharat Abhiyan
Your FDI proposals
Your ramblings on Mann Ki Baat

The middle class will decimate you and your party in 2019 !!!


This attitude explains why we were under slavery for 1000 years. We have no compunctions about endorsing anti-dharmic forces when faced with any inconvenience.

Khan, You deserve Pappu.

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Re: Budget 2016 - news & discussions

Postby SRoy » 01 Mar 2016 23:59

^^

He has explained he won't endorse ant-dharmic forces.
He isn't going to endorse anybody, least of all people that stole his retirement money. ;)

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Re: Budget 2016 - news & discussions

Postby KJo » 02 Mar 2016 00:50

SRoy wrote:^^

He has explained he won't endorse ant-dharmic forces.
He isn't going to endorse anybody, least of all people that stole his retirement money. ;)


Roy ji, if you look at his post, he clearly says he hopes Congress comes to power.
Congress = Adharmic
Hence we can say that Khan wants Pappu to be PM over NaMo.

Maybe because Pappu is more likely to shower goodies on Khans, Hussains and Abduls? :twisted:

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Re: Budget 2016 - news & discussions

Postby nirav » 02 Mar 2016 00:53

On a standalone basis, that post by asgkhan is a fantastic sarcastic post.
Too bad the intent was not that.

Anyway, must move this conversation to political dhagaa and avoid going personal/religional.

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Re: Budget 2016 - news & discussions

Postby disha » 02 Mar 2016 00:56

Why did the Sensex jump some 777 points post Budget?

That was a Jumbo Jump!!

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Re: Budget 2016 - news & discussions

Postby nirav » 02 Mar 2016 01:07

It was out of sync with global MKT. Budget being status quo with a +ve bias . massive short covering today.
Bright chances of an uptrend starting ..

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Re: Budget 2016 - news & discussions

Postby RoyG » 02 Mar 2016 01:17

Modi isn't following western policy prescriptions.

It will get you killed in India.

He is trying to capture power (RS majority) and for that you have to take control of the countryside.

First 5 years is to give India stability and defang C-System.

It's a balanced budget and the middle class will live.

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Re: Budget 2016 - news & discussions

Postby Gus » 02 Mar 2016 03:23

some babu said something like this tax was not intended a source of revenue..

so some backpedalling will be there, if not already.

anyways, this took all the attention away from anything else on the budget..which is good or bad? i guess nothing matters because whatever bjp does, they will only get bad press in media

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Re: Budget 2016 - news & discussions

Postby Kati » 02 Mar 2016 04:10

The latest Telegraph (Kolkata) article surmises the budget well; it has taken the wind away from the oppositions' sail. They are too confused to say if this is pro-poor or anti-poor. Stong emphasis on the rural economy in this budget has caught the opposition off guard.

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Re: Budget 2016 - news & discussions

Postby SwamyG » 02 Mar 2016 05:33

A smart budget under difficult circumstances.

Jaitley has eschewed any grandstanding or headline-grabbing announcements. Very much in line with Modi’s style, he has focused on specific measures to improve sector performances, achieve more efficient governance by cleaning up the administrative mess and focus on physical infrastructure, which will help in both growth acceleration and employment generation.



The proposals for reviving agriculture are typical of Modi’s approach of incremental, persistent change for achieving a large cumulative impact. The focus is on providing electricity to all villages and irrigation to each field. Thus, there is a time-bound programme for electrifying all the remaining 18,000 villages; fast-tracking 89 irrigation schemes to cover an additional 28.5 million hectares; allocating an unprecedented Rs 2.8 lakh crore to gram panchayats and municipalities as directed by the 14th Finance Commission; a first-time allocation of Rs 6,000 crore for groundwater management; setting up a long-term irrigation fund of Rs 20,000 crore; rehabilitating 500,000 ponds and dug wells under MGNREGS; raising the allocation for rural roads to Rs 19,000 crore to connect the remaining 65,000 eligible habitations by 2019; promoting organic farming; establishing a unified common agriculture marketing ePlatform for wholesale markets; and a provision of Rs 15,000 crore towards interest rate subventions for farmers. It would of course be even better if these could be combined with a forward-looking analytical framework for policy initiatives.


http://www.hindustantimes.com/analysis/ ... 5RDNJ.html

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Re: Budget 2016 - news & discussions

Postby vina » 02 Mar 2016 05:37

"Pensioned" society indeed. The Govt Jackasses are beyond belief. They take YOUR money away in perpetuity, lock it up, will use it for not YOUR pension, but rather as subsidy to finance and roll out a "universal pension" nonsense as a vote catching dole, which will pay a pittance when compared to what you put in and let go in terms of deferred consumption and taxes, especially when adjusted for inflation, it will be negative returns , and while continuing with a mai-baap welfare state where inflation runs like an uncontrolled diarrhea while in the rest of the universe it is stuck like a constipation !

Now, control inflation on long term (that will need fiscal and economic discipline), ask RBI to issue 30 year maturity long bonds, and you will have rationality in all this and the asset liability mis match of long term guys like insurance and pension funds will get fixed and you also have ability to raise long term finance.

But no, the Govt wants to borrow on the cheap, get the first crack at savings and crowd out private investment by financial repression. The Govt wants to run a mai baap nanny state, a command control idiocy of old which decides what is good for you (of course).

Tell them to F*ck off. It is economic fascism hitting the common man. This Govt has lost the plot. Modi said minimum govt and maximum governance. I just see Govt bloating , and Governance reducing.

I wish the JNU monkeys had raised THIS slogan, which is lot more relevant, but they are brain dead commies..sigh..
Economic Fascism se Azaadi!

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Re: Budget 2016 - news & discussions

Postby srin » 02 Mar 2016 06:02

Interesting thing those annuities: did you know that 34% of the EPF account is for EPS (out of employer's contribution of 12% of basic, 8.33% goes to EPS and 3.67% goes to EPF, and all your 12% of basic goes to EPF). And the EPS *is* supposed to be the annuities ... except that the max pension you can get now is just Rs. 3250 per month. Really pathetic. Makes NPS look really good. Clicky for the lowdown

So, is the Govt saying that in addition of 34% of the EPF contribution going to useless EPS annuities, they want us to get slightly better but still lousy annuities peddled by Insurance companies ? Or do they want to eliminate EPS altogether ?

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Re: Budget 2016 - news & discussions

Postby Kakkaji » 02 Mar 2016 06:10

I think the EPF Tax will be rolled back, so there is no point wasting more bandwidth on it. Let us discuss other parts of the budget.

I saw it mentioned that while the allocation for MNREGA is being increased, this time it will be focused on groundwater recharging in villages. It means digging ponds, wells, ad building check dams on a large scale all over India.

IIRC this is how Modi started his agri-miracle in Gujrat, by building check dams in all the arid areas. These are the kinds of projects that show results within a year. With Modi's laser focus on implementation, he will get it done.

Thoughts?

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Re: Budget 2016 - news & discussions

Postby member_29172 » 02 Mar 2016 06:24

Please post links or something

vina get that rhetoric under control, or do you need to be reminded of lakh-crores worth of monthly scams that used to pop up every month in the glorious congi era.
The uproar seems really moronic given the tax is a norm in most countries. Atleast the taxes deducted will return back to the people instead of going to the gandhi parivaar swiss bank. The hitler rhetoric is hilarious. I wish Modi was a hitler gassing the nuisance and traitors that plague this country, no more paki loving mulllas and commies, no evanjihadis. What a clean and peaceful country that'd be. Meanwhile your dear party was not only looting India and the people that you pretend to care so much for, blind, it was also actively promoting islamic terrorism. Another gem of the glorious congress

http://www.dailypioneer.com/todays-news ... vuukle_div

The changes in MNREGA are good, although ideally it should've been scrapped altogether. The new budget enables the village panchayats to directly get the benefits from the Centre instead of dealing with middle men. A good move to improve the earnings of rural area.

This link gives a lot of detail regarding the rural areas plans - http://indianexpress.com/article/busine ... borrowing/

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Re: Budget 2016 - news & discussions

Postby Gus » 02 Mar 2016 06:45

economic fascism ..LOL. Get a grip and wipe that froth.

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Re: Budget 2016 - news & discussions

Postby vina » 02 Mar 2016 06:57

Told ya.. Modi IS Marx+Cow . Here, Read it up . Even commie rags seem to agree.

But in any case, this govt has simply lost the plot. It is a classic tax and spend on dole, cloaked in saffron+cow . Amma does it on a grand scale. Modi is now in that template, with more taxation powers.

Modi is like Indira Gandhi of the 70s , replete with all this Garibi Hatao nonsense and maximum marginal rates approaching 99% and a whole load of taxes on a very small set of people, reams of controls and regulations with massive corruption (of the moral kind due to the license permit raj) and of course, roll forward 15 years, you see East Asia leaping forward and becoming developed from absolute Turd World, while India as a whole is wracked in mass misery.

Rinse and repeat today, change Modi to Indira Gandhi.

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Re: Budget 2016 - news & discussions

Postby shaun » 02 Mar 2016 07:17

In a way BR too showcase middle class aspirations, people here talks about how the previous "regime" almost wiped out our deterrence and capability and how the dark forces were and are propped by congi and its assorted allies. Now the same Middle class "aam janata" here got "pinched" and now dreaming of the "good old dark age" of the previous regime. Hypocrisy of highest standard... the rona dhona is into its 4th page . God save this country .

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Re: Budget 2016 - news & discussions

Postby nawabs » 02 Mar 2016 07:21

vina wrote:Told ya.. Modi IS Marx+Cow . Here, Read it up . Even commie rags seem to agree.

But in any case, this govt has simply lost the plot. It is a classic tax and spend on dole, cloaked in saffron+cow . Amma does it on a grand scale. Modi is now in that template, with more taxation powers.

Modi is like Indira Gandhi of the 70s , replete with all this Garibi Hatao nonsense and maximum marginal rates approaching 99% and a whole load of taxes on a very small set of people, reams of controls and regulations with massive corruption (of the moral kind due to the license permit raj) and of course, roll forward 15 years, you see East Asia leaping forward and becoming developed from absolute Turd World, while India as a whole is wracked in mass misery.

Rinse and repeat today, change Modi to Indira Gandhi.


Well, atleast its a new template for equating modi with Indira gandhi. The old ones were getting boring.

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Re: Budget 2016 - news & discussions

Postby kvraghav » 02 Mar 2016 07:32

People questioning the middle class tend to miss one thing. I am not against the Tax but the simple question, why should I pay 30% on the amount I earned when I was in 10% bracket. Instead give an option to opt out of EPF for both, employee and employer contribution since that too is part of CTC and I will happily invest It elsewhere. This is unfair law.

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Re: Budget 2016 - news & discussions

Postby member_29172 » 02 Mar 2016 07:43

The middle class munnas can stop whining now, just saw on aajtak that EPF tax has been supposedly revoked.

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Re: Budget 2016 - news & discussions

Postby member_29172 » 02 Mar 2016 07:47

Shaun wrote:In a way BR too showcase middle class aspirations, people here talks about how the previous "regime" almost wiped out our deterrence and capability and how the dark forces were and are propped by congi and its assorted allies. Now the same Middle class "aam janata" here got "pinched" and now dreaming of the "good old dark age" of the previous regime. Hypocrisy of highest standard... the rona dhona is into its 4th page . God save this country .


Meh, it's mostly modern congi supporters making noise because ebil Modi needs to be put in his place. Just look at vina's rhetoric above, ebil modi is so ebil he's a fascist and a marxist at the same time. :(( :(( :rotfl:

The people themselves are a curse on this country they just don't want to get out of the gutter and I am not even complaining about the whining regarding EPF tax law. Selling out the country for last 10 years wasn't enough for these modern worthies.

Anyways, another thread drowned in whines instead of useful disscussion and dissection of the budget. Wonder where the mods are.

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Re: Budget 2016 - news & discussions

Postby kvraghav » 02 Mar 2016 07:58

^^^
As I have made it clear before, we are all for taxing but tell me, why should I pay tax as per 2045 tax rules for the money I earned in 2016?

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Re: Budget 2016 - news & discussions

Postby negi » 02 Mar 2016 08:08

Again you guys are just reacting I am yet to see any valid points behind taxing EPF. Let me just try to play the devil's advocate.

1. Govt. wants to push people and companies to NPS : Well if that is the case then send a directive to everyone to move the funds from EPF to NPS or best why not merge the two ? I will tell you why for it involves 'WORK' no one wants to work babus would never recommend this for they will have additional work. So let us say the two stay separate and EPF is being taxed so why not give a 5 year time period for the law to take effect ? What about those who retire next year or in next 3-4 years ? Won't they end up paying tax on their accrued interest ? These are the people who might have joined service industry or gobmint in 70s or 80s how much would have they made anyway ? The bulk of these retirees would have been in low income bracket for 6th and 7th pay commissions came in recently.

2. EPF has creamy layer contributions too: fair enough but for fck's sake if target is creamy layer then increase their direct income tax no ; who is this numb nut who recommends this indirect approach where lot of low to middle income guys are targeted too ? I mean tell me this which step will get you more tax earnings as well as good PR ; increasing the tax slab of those with taxable income of say 20 lakh pa or more by 2% versus the existing proposal to tax the interest accrued on EPF ? Anyone who can do basic math would know the former would get you more tax money every year as well as a good PR no one will say this is gareeb ke pet pe laat , compare that with touching the EPF .

I cannot think of any other justification which was tabled , point being there is no sound financial or administrative benefit to justify this move , however the public outrage is there for everyone to see .

I did not see any moves to put heavy taxes on additional immovable property , nothing to promote card/cheque payments , nothing to discourage people from buying gold, real estate reform bill is in a limbo . So basically nothing has been done to widen the tax net only more taxes on same bunch of people.
Last edited by negi on 02 Mar 2016 08:15, edited 3 times in total.

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Re: Budget 2016 - news & discussions

Postby putnanja » 02 Mar 2016 08:09

kvraghav wrote:^^^
As I have made it clear before, we are all for taxing but tell me, why should I pay tax as per 2045 tax rules for the money I earned in 2016?


Isn't it the same for any investment you make now? When you withdraw it, you pay tax on the interest as per tax rate of the year the savings instrument matures.

A better way would be to limit EPF to people earning below Rs 10 lakh per year. The government does pay a high rate of interest on EPF, paying 8+ % interest even when savings rate in banks were around 6-7%. Allow more pension schemes, similar to 401k of US, and allow people to invest in any such pension scheme of their choice. There is no need for government to subsidize high interest for people earning more. Also give freedom to those people to invest in pension plan of their choice.

A safety net is needed for people in their old age, and its good if the government encourages variety of pension plans.

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Re: Budget 2016 - news & discussions

Postby kvraghav » 02 Mar 2016 08:15

putnanja wrote:
kvraghav wrote:^^^
As I have made it clear before, we are all for taxing but tell me, why should I pay tax as per 2045 tax rules for the money I earned in 2016?


Isn't it the same for any investment you make now? When you withdraw it, you pay tax on the interest as per tax rate of the year the savings instrument matures.


Nope. My principal is taxed on the time I make investment and earnings is taxed as per time of withdrawal.
EX: When I keep a 1 year FD of 1 lakh, the 1 lakh is taxed as per todays rule as it is current earnings and when I withdraw it after one year, only the interest of nearly 8K is added to next years earnings and taxed as per withdrawal rules unlike entire 1.08 lakhs being added to income in the withdrawal year and taxed. Over the years, if this gets compounded, it becomes huge.

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Re: Budget 2016 - news & discussions

Postby nawabs » 02 Mar 2016 08:27

Government to move amendment to EPF tax proposal

http://www.thehindu.com/news/national/g ... epage=true
Union Finance Minister Arun Jaitley will move an amendment to the budget proposal on the taxation of withdrawal of investments from the Employees’ Provident Fund.

The criticism of the proposal forced a reconsideration, a top government official told reporters, speaking on condition of anonymity, as the “Finance Bill is now a property of the House.”

The amended proposal will make only the interest accrued on 60 per cent of the contributions made after April 1, 2016 taxable, the official said.

An official release on Tuesday said Mr. Jaitley would consider all suggestions. “We have received representations today [on Tuesday] from various sections suggesting that if the amount of 60 per cent of corpus is not invested in annuity products, the tax should be levied only on accumulated returns on the corpus and not on the contributed amount,” it said.

Still confusion on the intention of this proposal remained through the day despite the official statement, including from Revenue Secretary Hasmukh Adhia. The confusion was caused by the speech and the Finance Bill Mr. Jaitley tabled to amend the Income Tax Act for this provision as they say separate things.

While as per the Finance Minister’s budget speech, 60 per cent of the total corpus, which consists of employer’s contribution, employee’s contribution and interest on both, will be taxable on withdrawal, the Finance Bill says something else. The Bill proposes amendments to the Income Tax law that will make 60 per cent of the employee contributions part, of the accumulated balance, tax free. “While the Finance Bill seeks to tax the corpus, the government has received representations suggesting that the tax should only be on the interest accrued... Therefore, the Finance Minister has agreed to revisit the budget proposal,” Mr. Adhia told The Hindu.

The new proposal under consideration is that interest accrued on 60 per cent of contributions made after April 1, 2016 will not attract any tax on withdrawal unless invested in an annuity plan, Mr. Adhia said. The contributions and interest accrued to the EPF before that and the withdrawal of principal after the cut-off date would remain tax-free, he said.


Why can't they just take the whole proposal back? Why tax the same set again and that too on the same source of cash. They themselves could not clarify the exact reason behind the tax. In the clarification, they say that it targets the high income private segment and then someone comes out and says that it is to force them to take care of their pension. Why, as if these people are financially irresponsible.

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Re: Budget 2016 - news & discussions

Postby negi » 02 Mar 2016 08:30

^ As I said it is a hogwash , if you want to extract another pound of flesh from so called high income class why not tax them directly ? You will get more money and without waiting for EPF to be withdrawn . They are in a pit and digging faster.

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Re: Budget 2016 - news & discussions

Postby kvraghav » 02 Mar 2016 08:32

How can there be so much difference between direct and indirect tax? That means many people are spending money but not paying income taxes. Just divide all commodities including land and gold, classify them to low, mid and High category and apply VAT accordingly and be done with it. Abolish income tax.

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Re: Budget 2016 - news & discussions

Postby nawabs » 02 Mar 2016 09:01

X-Post

http://www.dnaindia.com/india/report-ep ... ht-2184588

Iyer of EY India said: "From a point of view of taxation of income, if at all there is a case for taxation, it would be for taxing interest income and employer's contributions up to Rs1.5 lakh because the rest of the corpus is built up from tax paid income".

According to her there was only one annuity in the market; "To my knowledge, there is a provision 68 NNN in the Provident Act, which says if you want to purchase an annuity from the money that you are getting from your PF, you have to write to the PF Commissioner and then he will allow you to buy annuity plan from the Life Insurance Corporation of India (LIC)".


Is this what it is all about?

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Re: Budget 2016 - news & discussions

Postby Austin » 02 Mar 2016 09:13

Whats more worrisome and deeply disappointing is that henceforth we cannot remove Employer Contribution in EPFO after 2 months of unemployment but just Employee Contribution .....Thats nearly 50 % of your PF contribution that you cant touch before reaching 57 years of age.

Also the fact that after 3 years of inactivity the PF account will get dormant and we wont get any interest.

Thats sheer stupidity to force people to keep their money till age of 57 , Money that might be needed for many emergency situation , I personally would loose a significant chunk of money due to this rule now .......Cant believe they came up with this now.

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Re: Budget 2016 - news & discussions

Postby vina » 02 Mar 2016 09:20

Let them tax PF , I have no problem with it. But then, they simply should NOT FORCE people to compulsorily invest beyond tax benefits in the EPF.

Just let them that.. You can invest only upto a max of 1.5L or whatever in PF, the rest you pay out to the employee, it suffers tax and they are free to do whatever they want. The trouble is , you want to force them to save as PER YOUR DEMANDS (not as how the individual sees fit) , FORCE them to keep that money with you forever (threaten to tax them if they withdraw). So basically what the Govt is saying, is, YOU private sector sucker (who is the productive one, while the Govt is populated with blood sucking parasites), will not just allow you me to suck blood out of you and keep me fed forever, will ALSO, pay up 25% of your earnings to me forever and I will throw you crumbs after you retire on a monthly basis.

disha
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Re: Budget 2016 - news & discussions

Postby disha » 02 Mar 2016 10:11

kvraghav wrote:^^^
As I have made it clear before, we are all for taxing but tell me, why should I pay tax as per 2045 tax rules for the money I earned in 2016?


For you to understand that, first a rational debate has to be carried out. However page after page after page, several BRFites have gone to the la-la land - including the so called seniors - so how can one have a rational debate? But then outrage and burn and run is easy.

Now let me try to express in simple terms:

You put say X rupees for your retirement. Corporate you work for puts Y. The X+Y+Z where you earn Z interest on X+Y is yours at retirement.

Now, the corporate goes to the Government and says that Y is for your retirement and will not pay taxes on that. Basically they lower their tax bracket.

Now let us take one outcome:

You decide to leave the corporate, so what happens to your retirement money? Note you are not retired yet? You claim that you are entitled to all of X+Y+Z., the answer is no. You are not entitled to any of that unless you pay taxes if you are taking it pre-retirement. The money was for your retirement and you got a favourable tax treatment and also the corporate. You are basically cheating on an implicit promise that you are saving for your retirement and hence as an encouragement you are given a favourable tax treatment. So is your corporate.

Second outcome:

Let us say you retire in 2045 and decide to take the money. Now if you are lucky, you started your career at 25 years and was able to save 1.5 lakhs per year till 60 - so you got 35 * 1.5 = 43 lakhs and because of compounding on interest you may end up with 1.2 crore in your kitty. Now that puts you in a different tax bracket in retirement., if you take it the entire lot in one go. So the government gives you an option, take 40% and roll 60% into an annuity which pays you out evenly and you will not be taxed at all.

GOI can say that it also needs to equalise and after giving you your age related incentives, *will* tax you for higher income at the rate prevalent then if you opt for a lump sum. This protects you and also equalizes. You may not like it, but it does stand up to the scrutiny of the court.

Now which outcome do you think you fall into? What do you think the actual debate is all about? No scenarios have been played with some numbers. Only rona-dhona and burn and run.

disha
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Re: Budget 2016 - news & discussions

Postby disha » 02 Mar 2016 10:14

vina wrote:Let them tax PF , I have no problem with it. But then, they simply should NOT FORCE people to compulsorily invest beyond tax benefits in the EPF.

Just let them that.. You can invest only upto a max of 1.5L or whatever in PF, the rest you pay out to the employee, it suffers tax and they are free to do whatever they want. The trouble is , you want to force them to save as PER YOUR DEMANDS (not as how the individual sees fit) , FORCE them to keep that money with you forever (threaten to tax them if they withdraw). So basically what the Govt is saying, is, YOU private sector sucker (who is the productive one, while the Govt is populated with blood sucking parasites), will not just allow you me to suck blood out of you and keep me fed forever, will ALSO, pay up 25% of your earnings to me forever and I will throw you crumbs after you retire on a monthly basis.


Please let me know why Vina Saar is going incoherent and into ludicrous name calling?

Aditya_V
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Re: Budget 2016 - news & discussions

Postby Aditya_V » 02 Mar 2016 11:09

Austin wrote:Whats more worrisome and deeply disappointing is that henceforth we cannot remove Employer Contribution in EPFO after 2 months of unemployment but just Employee Contribution .....Thats nearly 50 % of your PF contribution that you cant touch before reaching 57 years of age.

Also the fact that after 3 years of inactivity the PF account will get dormant and we wont get any interest.

Thats sheer stupidity to force people to keep their money till age of 57 , Money that might be needed for many emergency situation , I personally would loose a significant chunk of money due to this rule now .......Cant believe they came up with this now.


The 3 year inactivity law was passed by UPA in 2010, I agree with 58 year rule, it is ok for people working in Govts or Single Co career, but whaat about people kicked out due to Office politics. It s better to give them thier money and ask them to invest.

vina
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Re: Budget 2016 - news & discussions

Postby vina » 02 Mar 2016 11:11

I always wondered why in India is the Govt Baboon a privileged species ?

1. You as a citizen pay FBT / company pays FBT on your perks. Why doesnt it apply to all Baboons , including their house and gaadi and phone?

2. You move your gaadi on transfer from state A to state B . You are forced to either sell your car and buy a new one in another state , or pay full lifetime tax in state B and claim a refund in state A, which is an expensive , leakage and corruption prone Baboongiri, with chances of you getting a refund in any reasonable time , close to zilch and if you move from State B to C, God save you. But a Govt Baboon pays only a yearly road tax in any state he moves. Why is a Baboon's private vehicle better than your own, and why is it the only a Baboon has the right to move seamlessly across states anywhere, while you don't ?

3. Sure, tax PF. But what about the Baboon's GPF ? Why is he not taxed on the GPF like yours is proposed. What if a Baboon quits a Gubmint job after 10 years and wants to withdraw his GPF. Is he going to be taxed or is it someone's case that a Baboon never leaves govt ?

vera_k
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Re: Budget 2016 - news & discussions

Postby vera_k » 02 Mar 2016 11:52

^^

If this is the case, it would run counter to Article 14 (Equality before law). Have there been any legal challenges to this absurdity?


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