What are the changes made to Section 80C and the tax treatment at the time of maturity in this budget?
- DG Siddhaye
It seems, your query is prompted by the change in taxation of withdrawals from Employees Provident Fund (EPF) which qualifies for a tax deduction under Section 80C of the Income Tax Act. To begin with, the finance minister hasn't proposed any changes to Section 80C of the Income Tax Act per se. The tax deduction available under the Section continues to be ₹1.5 lakh. However, there is a change in the tax treatment of withdrawal of accumulated corpus EPF. Now, you will be able to withdraw only 40 per cent of the corpus tax-free from EPF. Please note that the new rule is applicable only to corpus created with contributions from April 1. The corpus created before this date can be withdrawn entirely without any tax liability. You can avoid paying taxes if you use the remaining 60 per cent of the corpus to buy an annuity.
This article was originally published on March 02, 2016.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
