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Last Updated : Jan 14, 2020 02:17 PM IST | Source: Moneycontrol.com

Budget 2020: Govt may increase PPF exemption limit to Rs 2.5 lakh, exempt Rs 50,000 separately under NSC

The tax incentives might be announced during the Budget 2020 presentation on February 1.

The finance ministry is considering to increase the Public Provident Fund (PPF) investment limit from Rs 1.5 lakh to Rs 2.5 lakh under section 80C of the Income Tax Act, according to a report by The Economic Times.

The finance ministry is also mulling to have a separate segment under the section to give tax exemptions up to Rs 50,000 under the National Savings Certificate (NSC), the report added.

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Moneycontrol could not independently verify the report.

“A proposal to allow tax incentives on the small savings scheme, especially PPF and NSC, is with the finance ministry. If given a go ahead, these would be part of the budget announcement,” an official told the paper.

The proposed tax sops will enable taxpayers to save more money, the official added.

The tax incentives might be announced during the Budget 2020 presentation on February 1.

Currently, the tax exemption limit under section 80C of the Income Tax Act is Rs 1.5 lakh at present, which includes investments made under the PPF.

“The potential increased savings arising on account of an increase in the limit of PPF by Rs 1 lakh from Rs 1.5 lakh to Rs 2.5 lakh is immense if we consider that there could be over 3 crore individual taxpayers having a gross total income of Rs 5 lakh or more. Compared to other measures around providing tax relief, this one has the advantage of garnering significant personal savings,” Gautam Mehra, leader, tax and regulatory services, PwC India, told The Economic Times.

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First Published on Jan 14, 2020 01:04 pm
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