Finance Minister says withdraws proposal on taxation of pension fund

NEW DELHI (Reuters) - India has withdrawn a budget proposal to tax pension fund withdrawals, Finance Minister Arun Jaitley told lawmakers on Tuesday in parliament after an outcry by salaried workers.

Last month, Jaitley proposed taxing lump-sum withdrawals exceeding 40 percent of an individual's retirement pot in the Employees' Provident Fund (EPF), unless the sum is reinvested in a pension product such as an annuity.

At present, withdrawal from the EPF is entirely tax-free.

(Reporting by Rajesh Kumar Singh; Editing by Douglas Busvine)