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.
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.