<br/>In a sigh of relief to the salaried class, the government dropped the contentious proposal to tax provident and pension funds withdrawls and decided to continue with the major tax incentive on housing loans.<br/><br/>In the revised Draft Taxes Code or DTC, which will replace the 50-year-old Income Tax Act, the Finance Ministry decided to drop its earlier proposal to tax the Government Provident Fund or the Public Provident Fund withdrawals. <br/><br/>The draft says, in the absence of adequate social security benefits, taxation of withdrawals from retirement benefits would be harsh.