Budget 2016 - news & discussions

Austin · Post by **Austin** » 06 Mar 2016 06:47

GDP PPP would be better way to measure , If Rupee get stronger 50% over night wont mean in reality we are 50 % better off and vice verse if Rupee gets weaker 50 % wont mean we are worse off.

abhijitm · Post by **abhijitm** » 06 Mar 2016 08:44

This is one of the articles fund managers, wealth managers are floating. Theme is the same. 'give us pie of epf'

http://profit.ndtv.com/news/budget/arti ... es-1283103

What they must definitely do is to provide a tax neutral window for people to shift their funds from EPF to NPS and vice versa.

NPS is market linked and did not pick up at all. Now, I don't think many would transfer their money to NPS since people keep their EPF for different purposes. From the beginning I believed this EPF tax thing is a wink wink between corporates and the government to steal a pie of EPF. But yes, rather than forcing people to sink their money in corporate coffers better leave that decision to them...let them decide to transfer EPF to NPS on their own. It will not make corporates happy since they will not get the guaranteed pie of EPF but at least for now it will keep them shut.

Anyway, today media is reporting Modi has suggested AJ to 'deffer' (not rollback) the decision. Will wait and see.

abhijitm · Post by **abhijitm** » 06 Mar 2016 08:55

Some thing I observed I wanted to share. My in-laws both 70+ have not impacted by this epf tax at all. Both retired gov employees and hard core bjp supporters since many years and modi bhakt. I did not even speak about epf with them at all, expecting strong reaction from them, and anyway my blood pressure was sky high last couple of days. To my (pleasant?) surprise I came to know they are mighty upset with BJP on this and have even vowed now to vote them in next election. Their point is - they are not impacted, I am less impacted, but their grandchildren are highly impacted. So, no vote.

Another example, in my professional circle everyone is in shock over epf. Some of them have RSS background. One youngster words verbatim 'ye kya @@#$$giri kar raha hai modi?'. Some of them have signed the petition.

I hope BJP come to their senses and understand the reality on ground.

vishvak · Post by **vishvak** » 06 Mar 2016 10:25

A few things:
* As an example, say an IT professional working in USA has few options available in India for investments. PPF is THE only one for most who don't spend time investing more, and is the only fallback option when needed - is the back of mind fallback/calculations.
* It would be similar for a professional from the middle class in India. Better not to tax more when middle class is increasing.
* For middle class, there are some default things that occur every year. During inflation, direct/indirect taxes are increased and middle class is hit the most. During deflation, pending project works get max allocation on priority. For a middle class professional, this can't be overlooked.

I think these are the people who are affected the most. The govt should be more careful referring to the only fallback option ie PPF/EPF, regardless of class warfare kind of sloganeering from the left that may overshadow this.

Austin · Post by **Austin** » 06 Mar 2016 11:22

They need to roll back the EPFO Employer Part withdrawal before 57 year besides the interest part.

That would keep almost 50% of EPF locked till age 57 sheee insanity if you work for private sector or have emergency in need for fund

prahaar · Post by **prahaar** » 06 Mar 2016 11:56

Even 20 years back, my pitaji said, PF cannot be withdrawn prematurely, only loan can be obtained for house or daughter wedding in his company against the PF. Is the withdrawal aged limit thing new?

nandakumar · Post by **nandakumar** » 06 Mar 2016 16:18

prahaar wrote:Even 20 years back, my pitaji said, PF cannot be withdrawn prematurely, only loan can be obtained for house or daughter wedding in his company against the PF. Is the withdrawal aged limit thing new?

The word 'loan' is an euphemism. It is called non-refundable loan! It is typically availed for house construction, wedding and even payment of insurance premiums. This is the problem that the Govt is going to find impossible to solve. You can't deny people non-refundable loans for such sensitive objectives as housing and wedding. But it creates a dichotomy in tax treatment between those who avail non refundable loans and those who don't. The latter's tax burden is higher. Either that or forgo the option of marrying your daughter off after retirement!

Austin · Post by **Austin** » 06 Mar 2016 17:09

prahaar wrote:Even 20 years back, my pitaji said, PF cannot be withdrawn prematurely, only loan can be obtained for house or daughter wedding in his company against the PF. Is the withdrawal aged limit thing new?

You could withdraw the entire PF amount after 2 months of being unemployed , that was the case till less then a month back.

Now GOI has come up with new rule that allows the employee to withdraw the Employee component plus interest but not the Employer Component plus interest that nearly says 45 % of your PF amount you cant withdraw till you reach the age of 57.

This is stupidity and foolishness at best because an employee in private sector might not work for same organisation unlike PSU employee or might need the money for some emergency that gets locked till you reach the age of 57 !

For eg in my case this is a substantial amount now I cannot withdraw and I was depending on my Full PF amount for critical decision that I was planning for , Now all goes in thin air !

nirav · Post by **nirav** » 06 Mar 2016 18:31

Personal critical decisions of a few are indeed more important than the rest of the country.

Its okay to let the country go to the dogs, as long as those same "affected" people can avoid paying tax.

Austin · Post by **Austin** » 06 Mar 2016 19:42

Forcing people to keep half of PF money till 57 is not really affecting me but a lot of people I know off , they should give a choice not force people to keep it.

What if this critical decision of mine is related to medical condition of very close family member and I don't have other choice and my source is exhausted ? Should I wait till 57 to get my own money ?

Gyan · Post by **Gyan** » 06 Mar 2016 19:48

PF is tax free because:-

Our tax Exemption limit is very low but the Govt permits some tax saving through forced long term saving in EPF/PPF. So taking away this exemption is unfortunate. It seems that our budget is slowly being taken over by Market manipulators who want Indian Public to be "forced" to invest in Pvt Markets so that they can exit or push high cost instruments unto them.

disha · Post by **disha** » 07 Mar 2016 06:13

nandakumar wrote:Either that or forgo the option of marrying your daughter off after retirement!

There is lot of un-informed posts that has happened in the last page., addressing the core of each of them will take time. In the meantime, the above sentence really caught my eye.

Why would one marry off their daughter(s) using one's retirement money?

PS: IMVVHO, that is the most stupid thing to do.

srin · Post by **srin** » 07 Mar 2016 07:24

EPF is also a provident fund in addition to pension fund. When people in manufacturing jobs needed huge amount of money (medical, marriage etc), they used to withdraw from EPF. For a lot of people - and this includes many ITvity ppl - saving is EPF (+VPF), FD and LIC. My dad used to put extra savings into VPF.

Karthik S · Post by **Karthik S** » 07 Mar 2016 07:31

disha wrote:
nandakumar wrote:Either that or forgo the option of marrying your daughter off after retirement!
There is lot of un-informed posts that has happened in the last page., addressing the core of each of them will take time. In the meantime, the above sentence really caught my eye.

Why would one marry off their daughter(s) using one's retirement money?

PS: IMVVHO, that is the most stupid thing to do.

Sirjee, it's not stupid thing. The cost of conducting normal marriage function that too after cutting out many rituals will cost you 15-20L in major cities.

nirav · Post by **nirav** » 07 Mar 2016 10:18

Would lack of EPF for the self employed middle class and lower class mean that their daughters dont get married ?

Provident fund money = daughters marriage,buying a bigger flat,new car,forewing vacation,medical expenses, giving to children for bijness..
This was never the intent for EEE.

But its the reality in a large scale.

The govt is right in playing a nanny state.
Shri NM is the only leader who spoke of India's demographic dividend.He's also aware of the impending senior citizen boom.It certainly is in the larger interest of citizens to move to a pensions based retirement scheme.
Those in doubt should really pay a visit to an old age home.Amount of senior citizens being baghbaned is actually on the rise..

The whole idea behind taxing part of EPF is to push people towards NPS and also to save more.

nandakumar · Post by **nandakumar** » 07 Mar 2016 17:54

disha
i was alluding to an aspect of social reality in India. People do use PF money for such purposes. There is empirical evidence. The father is expected to meet expenses in connection with the marriage of a girl in the family. When viewed together with another aspect of reality which is that a son is expected to take care of parents in their old age, such spending may not seem so illogical. But more than that I was making a larger point, although in a lighter vein, that the tax proposal discriminates between those who have liquidated a portion of their accumulation on such items and those who haven't.

abhijitm · Post by **abhijitm** » 07 Mar 2016 20:10

Another article proposing to invest in funds. This article is scaring a shite out of working class now since epf is taxed

http://economictimes.indiatimes.com/wea ... 265407.cms

From next month, A. Balasubrahmanian, the CEO of Birla Sunlife Mutual Fund, will start putting more into equity and debt mutual funds. "The Voluntary Provident Fund is going to be taxed so I will stop putting money there and shift to mutual funds," he says.

"Only the portion of the corpus that claimed deduction under Sec 80C should be taxed. Taxing the corpus that has not claimed deduction will amount to double taxation," says Manoj Nagpal, CEO, Outlook Asia Capital. Oh mother lord what a kind merciful fund manager

So, what would be BJP's haircut in this wink-wink?

ragupta · Post by **ragupta** » 07 Mar 2016 20:18

daughters marriage,buying a bigger flat,new car,forewing vacation,medical expenses, giving to children for bijness..

If retiree plan to spend money of these activity, how do they plan to finance their monthly expenses. If they have other sources of income to pay for expenses, then they should use that other source for above activities.

In fact, such law can prevent retirees from making wrong decision in an emotional state.

After making emotional decision of frivolous spending, they will again want the state to take care of them.

Austin · Post by **Austin** » 07 Mar 2016 21:38

^^ The state any way does not take care of its citizen here , this is not America or Europe

These fund would be needed for many emergency situation and say if one parents son daughter needs medical treatment and you have that money that you cannot use before age 57 then what good is that for ?

Citizen should be given a choice and not forced to keep the money , Many would be satisified getting 8-9 % Interest in safety of EPFO and they would be happy to keep it in such funds till mandated age while other might have their own choice on how to invest or use it for some emergency

Suraj · Post by **Suraj** » 07 Mar 2016 22:39

While it is true that there's not yet a full-fledged safety net or even things like a national single payer healthcare system, there are efforts to create each of these. Similarly, the 40% withdrawal without taxation and remaining 60% going into annuities to avoid taxation is, seen in isolation, not such a bad thing. However, the communication of the whole thing has been quite poor, and looks like just another instance of GoI arbitrarily imposing a new tax suddenly without prior notice.

It is important for GoI to clearly state what their plans for a social safety net are. In the absence of that, people will respond in anger at the perceived notion that GoI is simply taking away their nest egg. In reality, actions of the government on several other fronts in the past 2 years suggest they are very keen to ensure that people have a proper safety net, though the emphasis has so far primarily been on farmers and farm related activity support, e.g. crop insurance, seed support etc.

SRoy · Post by **SRoy** » 07 Mar 2016 23:13

This entire provident fund and pension fund business ought to be optional for people above a certain income range.

That should take care of the argument of many misinformed people that govt. is doing a favour or "subsidizing" middle class. Don't need the alm. Nahi chahiye Bhai.

My EPF deduction per month (mine + employer ... my money only after all it is calculated out of the CTC) is very close to the home loan EMI that I pay. Means what? Means given a choice I can pay off the loan in half the agreed tenure.

Similarly, the problem with annuity part is similar. How much pension will it provide?
It won't even pay for the monthly grocery. However a lump sum pay out means atleast I can pay off my home loan, keep something at hand for emergencies.

Key to understand here is that nobody plans to use EPF funds for day to day expenses after they quit working. That money is managed from somewhere else. Rather EPF funds are planned to be used for big bang expenses at some point.

The misinformed lot also does not understand one more thing. People will still stay invested in EPF even if the interest rate drops substantially. Means ? Meaning EPF is NOT AN INVESTMENT, it is treated as an insurance. I don't need a high interest, but I want the GoI to stand guarantee for what I have entrusted it with.

The way forward should be to abolish the EPF altogether. Ask people to manage provident fund via PPF only, raise its limit.
Take the pension fund part from the just abolished EPF, provide choice of exit for existing salaried class with fund as on date. Those still opting in or new subscribers continue to contribute which gets automatic conversion to annuity to around 55 years of age.

Suraj · Post by **Suraj** » 08 Mar 2016 00:18

Please avoid using ad hominem terms like 'misinformed lot' . Such emotional language will be dealt with immediately in future.

It would help if there are statistics showing that a significant number of people withdraw their EPF corpus upon retirement, or for big ticket purchases. Anecdotal evidence does not really qualify here. If there's no data, it's fair to agree that there's no basis to make a claim either way.

disha · Post by **disha** » 08 Mar 2016 03:59

nandakumar wrote:disha
i was alluding to an aspect of social reality in India. People do use PF money for such purposes. There is empirical evidence. The father is expected to meet expenses in connection with the marriage of a girl in the family. When viewed together with another aspect of reality which is that a son is expected to take care of parents in their old age, such spending may not seem so illogical. But more than that I was making a larger point, although in a lighter vein, that the tax proposal discriminates between those who have liquidated a portion of their accumulation on such items and those who haven't.

No it does not. In fact it can be argued that a favourable tax treatment (tax exempt) for those who liquidate their EPF early while those who do not are given an undue advantage. So the persons who decide to keep it in the system, say they have no kids or have a single son who is well-settled or two daughters, both are well settled and funded their own marriages from their professional incomes without creating a dent in their parent(s) EPF are now discriminated because they have to payout tax-exempt money to what is a seemingly frivolous expense of others (say people paying for their daughter's marriage).

For a moment think of the EPF as a large pool of money attracting returns based on its size. With a volatility introduced by such decisions which take the floor out of the pool there is difficulty associated in managing that pool. The nearest analogy I can give for others to read up on is the closed-end/front-load or back-loaded mutual funds of US.

So a social norm, which is indeed financially flawed cannot be used as a basis to determine the withdrawals on a financial instrument. For example, one cannot say that dowry is a social norm and hence to fund dowry withdrawals from a tax-retirement fund should be allowed tax free. Paying for daughter's wedding sounds similiar to a dowry program

Austin · Post by **Austin** » 08 Mar 2016 10:06

Suraj wrote:While it is true that there's not yet a full-fledged safety net or even things like a national single payer healthcare system, there are efforts to create each of these. Similarly, the 40% withdrawal without taxation and remaining 60% going into annuities to avoid taxation is, seen in isolation, not such a bad thing. However, the communication of the whole thing has been quite poor, and looks like just another instance of GoI arbitrarily imposing a new tax suddenly without prior notice.

It is important for GoI to clearly state what their plans for a social safety net are. In the absence of that, people will respond in anger at the perceived notion that GoI is simply taking away their nest egg. In reality, actions of the government on several other fronts in the past 2 years suggest they are very keen to ensure that people have a proper safety net, though the emphasis has so far primarily been on farmers and farm related activity support, e.g. crop insurance, seed support etc.

Look I am fine with GOI decision for safety net , retirement planning etc but we need an informed debate in the country over it both at the Public Level and in Parliament , We havent seen any thing of that yet. I am sure we can come to one common view here after these discussion what is in the best interest of citizen and country

Instead all we see here is government limiting part PF withdrawl till age 57 and then the so called tax on these withdrawl.

For people like us who stay in this country and millions like me this is a BIG BIG Decision taken without any Public Debate on whats good for us .......... The GOI is now behaving like Central Bank .......As Neshant puts it Few people sitting in Ivory tower deciding what is good for the Economy

abhijitm · Post by **abhijitm** » 08 Mar 2016 11:37

Victory!!!

Suraj · Post by **Suraj** » 08 Mar 2016 12:09

Austin wrote:Look I am fine with GOI decision for safety net , retirement planning etc but we need an informed debate in the country over it both at the Public Level and in Parliament , We havent seen any thing of that yet. I am sure we can come to one common view here after these discussion what is in the best interest of citizen and country

Instead all we see here is government limiting part PF withdrawl till age 57 and then the so called tax on these withdrawl.

For people like us who stay in this country and millions like me this is a BIG BIG Decision taken without any Public Debate on whats good for us .......... The GOI is now behaving like Central Bank .......As Neshant puts it Few people sitting in Ivory tower deciding what is good for the Economy

For better or worse, a lot of things when it comes to social security net are not created as a result of detailed public debate. Why ? Because that's a surefire way to generate analysis paralysis. The 'socialists vs capitalists' argument will bear itself out, with some vehemently asserting that they want no safety net at all, because they're comfortable with their own savings, while others assert the opposite.

If the discussion following the budget has shown anything, it's that people are vehemently focused on their own personal wellbeing and not for the creation of any entity or system that works for the society at large. There have been arguments about personal struggles and daughters' marriages. But I don't recall a single argument talking about how pension system A would be more collectively beneficial than B *even* if individually, people stand to gain more from B than from A, in the short term or long term.

Generally, all such social safety nets are created in a top down manner and not via referendums like you ideally argue for. Even the EPFO was created by an Act of Parliament on the basis of the constitution stating that the government should provide for the wellbeing of people. It wasn't done by any sort of extensive debate. It's simply an ad hoc setup that people are used to, nothing more. Ditto for the NHS in UK or Social Security Administration in US. What will happen next is that GoI will blunder along and somehow define a social security system encompassing healthcare, pensions and other forms of insurance, and people will progressively get used to it.

Also, please don't bring in personal us vs them arguments trying to differentiate domestic and international posters. That's a surefire way to get you censured. If you cannot treat your fellow members here a comrade, and consider yourself 'better' than them, why should you expect fair treatment, after all ? Please think carefully before indulging in such talk, because you'll get no further latitude for it.

srin · Post by **srin** » 08 Mar 2016 13:29

When the Govt forces (because EPF isn't optional) people to invest in inferior products (like annuities) without knowing that there is already a pension scheme (EPS), then there is bound to be blow-back. It is after all a matter of choice - how I will have annuities (there is senior citizen savings scheme too in addition to mutual fund MIPs) or what I consider as emergency situation.

It tried to force its opinion on what we need to do with our money - irrespective of our financial status - and got its fingers burnt and goodwill lost.

Dumal · Post by **Dumal** » 08 Mar 2016 14:14

I am afraid quite a few folks are making too rosy assumptions on EPS, not understanding it fully. It is not an interest-bearing individual account like EPF and will not be something people can ever get access to as a corpus. The subscription to it, I assume, is mandatory for anyone with an EPF account and used to be a flat Rs. 540 for anyone with basic salaries above 6500pm. It has been recently raised to a flat Rs. 1250 per month. If the salary were to be less then 15000 then it is 8.33% of the salary.

What you get back, in the normal course after 58 years of age, is a pension certificate that will entitle one to receive about Rs 3250 per month earlier and now, I assume, Rs. 7500 monthly. I think it is set at 50% of your monthly salary but capped at salary levels of 15000 for those earning higher.

So, in all, EPS is not something most people on BRF would see as meeting even an apartment maintenance fee in 15-20 years from now.

vina · Post by **vina** » 08 Mar 2016 14:18

abhijitm wrote:Victory!!!

Only after the Economic Chief Baboon (Shaktikanta Das) and the rest of his Baboon troop is fired. Those guys are simply clueless and their times will be better spent cooling their heels in the Hindi Vibhaag or some Culture Ministry promoting Nehruvian though or some such similar zoo. Time to keep their flea picking hands away from anything that is remotely important.

srin · Post by **srin** » 08 Mar 2016 14:20

@Dhumal - I suppose you are referring to my post. And no, I do understand EPS and its uselessness. See this: viewtopic.php?f=2&t=7176&p=1987350#p1987350

srin wrote: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 ?

So, the point is a third of your money is already going for the sake of pension - so why don't they reform it, instead of forcing you to buy annuities on top of it.
Moreover, I'd also posted a link to TOI interview with Jayant Sinha where he asked rhetorically if EPF has pension

Dumal · Post by **Dumal** » 08 Mar 2016 14:42

Not just you but there were quite a few others as well. In any case, not sure where you get the 34%. It will be 8.33% of salary only if the salary was 15000 or less. If it is more, the subscription is capped to flat 1250 per month. You can check your EPF/EPS statements to verify. Because it is capped on the input side, the pension outgo is also capped to something like 7500 per month. It is meant to meet at least some of the needs of the lower income earners, maybe also the middle-income earners from 10-20 years ago!

That is where trying to categorize EPF as purely "withdraw and spend lump-sum" approach starts to make little sense and could lead one to an almost pension-less future in the old age!

nirav · Post by **nirav** » 08 Mar 2016 15:07

There's only so much goberment can do if people are hell bent on being baghbanned.

Country's demographic dividend *will* mature.and with a large senior population there will be shrill cries of govt not doing anything for oldies.

Must congratulate members here who threw vitriol at the govt and got it to roll back one of the most significant long term reform it had taken.
What could have been being a part of making history has been thoroughly squandered.
Great work,"rakshaks" ..

Austin · Post by **Austin** » 08 Mar 2016 15:32

Suraj wrote:For better or worse, a lot of things when it comes to social security net are not created as a result of detailed public debate. Why ? Because that's a surefire way to generate analysis paralysis. The 'socialists vs capitalists' argument will bear itself out, with some vehemently asserting that they want no safety net at all, because they're comfortable with their own savings, while others assert the opposite.

If the discussion following the budget has shown anything, it's that people are vehemently focused on their own personal wellbeing and not for the creation of any entity or system that works for the society at large. There have been arguments about personal struggles and daughters' marriages. But I don't recall a single argument talking about how pension system A would be more collectively beneficial than B *even* if individually, people stand to gain more from B than from A, in the short term or long term.

Generally, all such social safety nets are created in a top down manner and not via referendums like you ideally argue for. Even the EPFO was created by an Act of Parliament on the basis of the constitution stating that the government should provide for the wellbeing of people. It wasn't done by any sort of extensive debate. It's simply an ad hoc setup that people are used to, nothing more. Ditto for the NHS in UK or Social Security Administration in US. What will happen next is that GoI will blunder along and somehow define a social security system encompassing healthcare, pensions and other forms of insurance, and people will progressively get used to it.

Also, please don't bring in personal us vs them arguments trying to differentiate domestic and international posters. That's a surefire way to get you censured. If you cannot treat your fellow members here a comrade, and consider yourself 'better' than them, why should you expect fair treatment, after all ? Please think carefully before indulging in such talk, because you'll get no further latitude for it.

Suraj, this is a substantial chunk of money involved not few naya paisa or thousand of rupee , The Government should give an option to people who would like to continue with the existing way or the way government proposes.

I am sure People are intelligent enough in this country to make a decision on how they want their retirement saving to be planned either opt for Government option and opt for the way they want it provided they get the entire PF money back and not force part of it till 57 years.

Specially people who work in Private sector and they keep changing job more often then government employee.

Interest rate down the line will go down and 57 years is a long long time ( they also have a clause if PF account is dormant for 3 years interest wont be provided )
, They should have few exit clause because an Emergency can come in many ways to a person and need not just be related to his health issue.

I didnt say any thing about us versus them , AFAIK EPFO is only valid for Indian citizen working in India. Nothing personal.

Just stating that Social Security is needed and government need to keep part of the fund till they reach xyz age because in their Wisdom Government is Right is akin to blocking peoples money.

SaraLax · Post by **SaraLax** » 08 Mar 2016 17:30

vina wrote:
abhijitm wrote:Victory!!!
Only after the Economic Chief Baboon (Shaktikanta Das) and the rest of his Baboon troop is fired. Those guys are simply clueless and their times will be better spent cooling their heels in the Hindi Vibhaag or some Culture Ministry promoting Nehruvian though or some such similar zoo. Time to keep their flea picking hands away from anything that is remotely important.

What a Baboonish post !
Do keep your arrogance under check !. Surely you can be more civil, far less bombastic with a reduced display of your egotistic manners and still make sense through your posts !!

Below listed are couple of randomly picked articles on Mr.Shaktikanta Das & his track record !.

Government appoints Shaktikanta Das as Revenue Secretary

Bloomberg Profile

Why do you use demeaning words to call out IAS officers ?. How much effort do you even put to know about somebody before you accuse them in a senseless fashion (like Mr.Shaktikanta Das in this case) ? Do you behave like this because the internet provides you a virtual world where your real identity isn't supposedly revealed and hence you resort to attacking others using all sorts of demeaning words ?. If so - Shame on you.

One can say that the finance & budget associated officers 'erred' initially in coming with taxes on EPF but later understood the revulsion evoked among the middle class by their policy & soon reverted their decision. Certain aspects of governance are atleast working and some may say - certain bold decisions (in a relative sense) - are being taken without worrying about their impact on votebank politics by the present government atleast.

I am not a rich guy in any way and the only earner of my family of 2 daughters and they are both very young still. I am no MBA style, suited booted, oxford english gilded corporate baboon (are you not one ?). Ever since this NDA govt came to power - I have lost the subsidies i used to get on Diesel and LPG. I am waiting for a hike in my electricity price. I am disappointed with the EPF taxation policy but I would still vote for a MODI led government that is making efforts to reform & lead the country in an active manner. Make In India may fail, Digital India may fail, Smart Cities may fail, UDAY may fail but atleast there is a government that is thinking actively, coming out with policies, taking feedback and changing certain implementation ideas.

The government (or rather the country) may fail in its implementation of these policies and we can fault them for it. But we cannot fault them for not attempting to think and come out with ideas for India's future and a future where my daughters can have a simple, meaningful life sans worrying about having to flee to a foreign country.

It is better to critique the policies than run down the policy makers (IAS officers) as Baboons.

Picklu · Post by **Picklu** » 08 Mar 2016 17:55

A large number of people have invested every naya paisa they have in real estate or some such illiquid avenue for the spectucular growth they provide (and in the mean time create the bubble).

So for them, EPF is the one and only surce of money in emergency and any change of provision will be met with howls of protest.

In the meantime, everyone else would be advised of "reform".

Suraj · Post by **Suraj** » 08 Mar 2016 20:05

Austin wrote:Suraj, this is a substantial chunk of money involved not few naya paisa or thousand of rupee , The Government should give an option to people who would like to continue with the existing way or the way government proposes.

I am sure People are intelligent enough in this country to make a decision on how they want their retirement saving to be planned either opt for Government option and opt for the way they want it provided they get the entire PF money back and not force part of it till 57 years.

So far in this debate, neither BRF members nor the GoI have demonstrated much sense in their respective actions. What's more, many arguments reveal both good and bad factors involved here. An example of good issues stated are that people stated they actually have such a small margin of safety that they are compelled to liquidate a substantial chunk of EPF holdings for major and unexpected moments in life. Some bad factors stated are the reasons given like daughter's marriage. It's a valid argument, but not necessarily a good one. Just because it's a social norm doesn't make it 'good' spending. Similarly, GoI has arguably done exactly what you ask - give an option regarding lumpsum encashment without penalty. They considered 40% good, and the rest not taxed if you put it in an annuity.

Overall, people demonstrated they are very intelligent at furthering their own self interest. I can't say they've necessarily demonstrated the ability to think of the larger common good over their own interest. Likewise, GoI is demonstrating they actually are thinking of a large social security net, but they haven't demonstated that their communication skills regarding informing the citizenry of their plans is anything more than abysmal .

My disagreement - and yes, if you read all my posts here and in politics thread, I advocated rolling back the EPF tax plan all this while - with the EPF tax centers around the lack of communication from the government, and the ad hoc means by which it was announced, without giving substantial prior notice and thereby being very unprofessional. Citizens are much more likely to accept a tax and social security plan where they understand what they get in return for the taxation changes they encounter, and where the plan has a clear onset and sunset process spread over years, giving people time to plan accordingly.

abhijitm · Post by **abhijitm** » 08 Mar 2016 20:20

Suraj wrote:Overall, people demonstrated they are very intelligent at furthering their own self interest. I can't say they've necessarily demonstrated the ability to think of the larger common good over their own interest.

What is wrong in that? When it comes to reality of life you are on your own. It is easy to take high moral ground but asking a section of society to suck up and sacrifice for 'greater good' (God only knows what is that...probably don't criticize my BJP or do it but vote them) is immoral IMHO.

member_22733 · Post by **member_22733** » 08 Mar 2016 20:22

Then why pay taxes at all? Completely deal in black money. Let the roads and infrastructure etc go to hell.

Suraj · Post by **Suraj** » 08 Mar 2016 20:25

abhijitm wrote:What is wrong in that? When it comes to reality of life you are on your own. It is easy to take high moral ground but asking a section of society to suck up and sacrifice for 'greater good' (God only knows what is that...probably don't criticize my BJP or do it but vote them) is immoral IMHO.

I didn't say it's wrong. I'm simply saying that both GoI and the people demonstrated exactly the same ability, so blaming them for doing exactly what people themselves want to do themselves, is just a very interesting argument. People get so wrapped up in 'my life is so difficult! how dare you question me!' anger that they simply stopped seeing things as they are in this matter. This isn't a qualitative argument or criticism of one party alone, despite your desire to make it one.

nirav · Post by **nirav** » 08 Mar 2016 20:31

abhijitm wrote:
Suraj wrote:Overall, people demonstrated they are very intelligent at furthering their own self interest. I can't say they've necessarily demonstrated the ability to think of the larger common good over their own interest.
What is wrong in that? When it comes to reality of life you are on your own. It is easy to take high moral ground but asking a section of society to suck up and sacrifice for 'greater good' (God only knows what is that...probably don't criticize my BJP or do it but vote them) is immoral IMHO.

are you aware of any policy by the govt for the non salaried class which is EEE ?

and what sacrifice ? EPF will eventually get taxed. Getting EEE is not anyones birthright ! That it was EEE all these years was a BIG favour and still is !

This attitude is actually validating the old saying, kandhe pe bithao toh ...

Financial experts here rant about "their money" and not getting a choice to invest on their own with "their money" .. and then go on to talk about why they oppose the tax as they will use the EPF money for "daughters marriage" ...

on one hand, a person talks about having to dig into his retirement corpus for "daughters marriage" and on the other hes trying to pass off as a pro choice investment expert.

I mean, really !