I own my money

This was a chaotic and confusion-filled week for the salaried classes. It began making its presence felt the moment Arun Jaitley announced his third Union Budget last week.
The employee provident fund (EPF) is the backbone of a private employee, but the government announced it wanted to trim this retirement support by imposing a tax on it during withdrawal. The resultant hue and cry created dangerous ripples in the employee community creating such an impact that Jaitley had to rollback the retrospective proposal in Parliament on Tuesday. Retirement time is a very crucial period for an old person where his lifelong hopes hinge on the corpus earned through his three-decade or so professional life. In smaller cities or rural areas like my town, most retired people withdraw EPF and start a small business from where they can earn enough money. Even though the government’s intention of helping a retired man to overcome old-age hardships is real, the method implied to achieve it is not correct. The problem with annuity is that the money is blocked for life, the returns are lower than the other financial instruments and the payout from annuity is taxed. I wonder why the government forgot about the value of liquidity in an old retired life, where medical emergencies are frequent. One of the arguments of the government was to level EPF with the national pension scheme (NPS), but it appears that the finance minister has overlooked failure of the NPS. The National Pension Scheme has failed to get the number of subscribers it expected because it does not generate as high post-tax returns as the EPF.
Nevertheless, the government has succumbed to pressure from every nook and corner and has finally reversed the decision after facing a backlash from the salaried classes. During the last one week, I could not but help think, “God help us retrieving our hard-earned money, where black money gets easily absorbed and public money gets effortlessly grabbed by biggies like Vijay Mallya”.



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