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Confusion no more! PPF stays on tax exemption list

BI India Bureau | Mar 1, 2016, 02.07PM IST
After the salaried class expressed their discontent over tax on PPF scheme, the government has finally withdrawn the proposal.

The government said the PPF will not be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 1 will be taxed while principal will continue to be tax exempt.

Revenue Secretary Hasmukh Adhia said, "The principal amount will not be taxed and will continue to remain tax exempt on withdrawal. What we have said is 40 per cent of the interest accrued on contributions made after April 1 will be tax exempt and its remaining 60 per cent will be taxed."

Adhia said that no part of PPF will be taxed and the present scheme of investment up to Rs 1.5 lakh in a year will continue to be tax exempt. PPF on withdrawal will continue to be out of the tax ambit.

(Image: Thinkstock)

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