A recent change to the income tax law proposed in the Finance Bill, 2021, has triggered anxieties for the salaried class: withdrawing tax exemption on interest income accrued into Provident Fund accounts arising out of employee contributions exceeding Rs2.5 lakh ‘in a previous year in that fund,’ on or after April 1, 2021. The rationale — some employees are contributing huge amounts into their PF accounts and getting tax-free incomes. Subsequently, the Revenue Department has pointed out the tax will only affect a small group of ‘high net-worth individuals’ (HNIs); the 100 largest employees’ PF (EPF) accounts had a combined balance of over Rs2,000 crore. It can be no one’s case that a social security scheme for formal sector workers should become an investment haven for the well-heeled corporate top brass. However, the threshold proposed to exclude the so-called HNIs appears low, as it would end up partially taxing PF income for even those putting away Rs21,000 a month towards their retirement — hardly a typical HNI given it may take the saver decades to attain Rs1 crore PF balance. The threshold also does not tie in with the Rs7.5 lakh limit set in last year’s Budget for employers’ contributions into the EPF, National Pension System (NPS) or other superannuation funds (rules for which are yet to be notified). This is not the first time this government had tried to tax PF savings, citing its abuse by the rich. In the 2016-17 Budget, it proposed to tax 60% of EPF balances at the time of withdrawal, but backtracked after a backlash. Now, it has covered even government employees’ contributions into the GPF, but left NPS investments over Rs2.5 lakh a year untouched. Tax treatment inequity between India’s limited retirement savings instruments aside, there some serious doubts on the implementation. The government must clear them at the earliest.