India Withdraws Proposed Employer Social Tax Changes

By Jared Mondschein

March 14—The government's proposal to increase the tax free threshold for employer contributions to a recognized provident fund has been withdrawn, Indian Finance Minister Arun Jaitley said in India's parliament March 14.

The proposed 2016-17 budget would have increased the tax-free threshold to 150,000 rupees ($2,235) from 100,000 rupees ($1,490), effective April 1, 2017.

Current law, which stipulates that any employer contributions to a provident fund up to and including 12 percent of an employee salary is income tax free up to 100,000 rupees, remains unchanged.

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For More Information

A government announcement on Finance Minister Arum Jaitley's statement is available at

More information on payroll issues in India can be found in the India country primer and in the International Payroll Decision Support Network News.