Budget 2022: The Union Budget, in one way or another affects the lives of almost every section of the society. And expectations from Union Budget 2022-2023 are no different. From government employees to businessmen, everyone is waiting to see what the government has in store for them when the budget is presented in Parliament tomorrow.
For instance, PPF investors are expecting Finance Minister Nirmala Sitharaman to increase the maximum deposit limit fixed under the Public Provident Fund (PPF) scheme. At present an individual can invest up to Rs 1.5 lakh per year in a PPF account. This deposit is also eligible for tax deduction under Section 80C of the Income Tax Act.
Many experts believe that the annual deposit limit of PPF can be increased to Rs 3 lakh Budget 2022, There is also a demand to increase the deposit limit of Section 80C to Rs 3 lakh.
If the government accepts the request, then in a year under 80C, investors will get a tax exemption of Rs 3 lakh instead of Rs 1.5 lakh. Since 2014, the current deposit limit of Rs 1.5 lakh per annum remains unchanged.
Those demanding an increase in the PPF deposit limit say it is the safest tax-saving scheme available for the self-employed. Salaried employees have the option to invest in various provident fund schemes. But the non-salaried and self-employed have only PPF as a long term investment plan in which one can save tax by investing.
Salient Features of Public Provident Fund
- At present the interest rate on PPF account is 7.1%. The government reviews the rates every three months which can either increase or decrease.
- PPF account can be opened with a minimum of Rs 500. This amount has to be deposited once every year to avoid penalty and account closure.
- The maximum amount that can be deposited in a PPF account in a financial year is Rs 1.50 lakh
- This plan is for 15 years, and the money cannot be withdrawn midway before the completion of the plan period. But it can be extended after 15 years for 5-5 years.
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