Retirement benefits not to be taxed -- Cenrtal Government

The government said provident funds would not be taxed on withdrawal and dropped
a proposal to levy Minimum Alternate Tax from corporates based on their assets
from the revised draft Direct Taxes Code.

The Code, released for public discussion, does not give any details on the
Income Tax structure such as the slabs or rates, which were provided in the
first draft released in August 2009.



Based on the outcome of discussion on the revised draft code, the government
will bring in a new Income Tax legislation to replace the archaic Act of 1961.



Revenue Secretary Sunil Mitra said the taxation rates in the first draft, which
suggested 10 per cent tax on income from Rs 1.60-10 lakhs and 20 per cent on
income between Rs 10-25 lakhs and 30 per cent beyond that, were illustrative.



He said the tax rates would be made known only in the proposed Act, a bill for
which will be introduced in Parliament in the coming monsoon session.



"As of now, it is proposed to provide the EEE (Exempt- Exempt-Exempt) method of
taxation for Government Provident Fund (GPF), Public Provident Fund (PPF) and
Recognised Provident Funds (RPF) ...", the revised DTC released by the Finance
Ministry said.



The revised draft also puts pensions administered by the interim regulator PFRDA,
including pension of government employees who were recruited since January 2004,
under EEE treatment.