NEW DELHI: Amid criticism over the proposed tax changes for those contributing over Rs 2.5 lakh annually towards provident fund, the government on Thursday said there are only 1.2 lakh accounts of high networth individuals who contribute “huge sums”.
Among the HNIs is one individual with a balance of Rs 103 crore in his account with Rs 86 crore being the second highest corpus. Sources said that the top 20 HNIs have about Rs 825 crore in their accounts, while the top 100 have a balance of more than Rs 2,000 crore.
HNI contributors are estimated to be around 0.3 % of the EPF account holders with an average corpus of Rs 5.9 crore per person, fetching them annual earnings of Rs 50.3 lakh per subscriber, and tax free under the current dispensation.
In all there are around 4.5 crore employees provident fund contributors and the high net worth individuals chip with around Rs 62,500 crore to the PF kitty, a finance ministry source said.
“The government has done away with this disparity of paying huge sum of tax free interest to HNIs at the cost of honest average salaried class contributor and taxpayers,” an official argued, justifying the tax proposal in the budget.
The government has argued that a normal subscriber of EPF or General PF for government employees will not be affected by the removal of “anomaly” in the system.