In her budget presented to Parliament on February 1, the Minister of Finance Nirmala Sitharaman had provided this interest on employee contributions the contingency fund of more than Rs 2.5 lakh per year would be taxed from April 1, 2021.
In response to the debate on the 2021 finance bill at Lok Sabha, Sitharaman made the announcement regarding increasing the limit to Rs 5 lakh in cases where employers do not make contributions to the provident fund.
The finance bill, which gives effect to the tax proposals for 2021-2022, was approved by voice vote.
The bill was passed after the acceptance of 127 amendments to the bill.
The minister also stressed that the tax on interest on the contribution to the contingency fund only affects 1% of contributors, and the others are not affected because their contribution is less than Rs 2.5 lakh per year.
Referring to questions raised by various members about increasing fuel taxes, Sitharaman said she would like to discuss the issue of introducing gasoline and diesel under the GST at the next Council meeting. of the GST.
She also reminded members that it is not only the Center that taxes fuel and that states also impose levies.
The finance minister also said that the rationalization of the tariff structure will be undertaken to help domestic businesses, especially MSME segment.
Regarding taxes, she insisted on the need to broaden the tax base. Regarding the equalization levy, she said it aims to provide a level playing field for domestic companies that pay taxes in India.