PPF Login: People have different expectations for Budget 2023. One of these expectations is also the demand to increase the amount of investment in Public Provident Fund (PPF). In fact, in a memorandum submitted to the government in the pre-budget, the Institute of Chartered Accountants of India (ICAI) has demanded that the investment limit in PPF should be raised to Rs 3 lakh per annum from the existing limit of Rs 1.5 lakh.
the total investment in the scheme and its popularity, the PPF investment limit has not been increased for the last several years. The three tax benefits offered through the scheme attract PPF investors. Investment up to Rs 1.5 lakh/year in PPF is eligible for tax exemption under section 80C. Also, there is no tax on the interest earned and the amount withdrawn at the time of maturity.
Why ICAI wants change in PPF limit?
According to ICAI, increasing the limit of PPF contribution can encourage household savings and also benefit the account holders. ICAI says that PPF is used by entrepreneurs and professionals as a means of savings. While in employment there is an obligation to save 12% of one’s salary (with equal contribution from employers). PPF is the only safe and tax-efficient savings option available to self-employed people. Therefore, it has been suggested to increase the PPF contribution limit to Rs.3 lakh.
Domestic savings can also be promoted
ICAI said that it can also promote domestic savings as a percentage of Gross Domestic Product (GDP) and it will have an anti-inflationary effect. The current limit of Rs 1,50,000 has not been increased for many years and needs to be reconsidered. The revised monetary limit will help in increasing the savings of the people and this is necessary keeping in view the rate of inflation.
The suggestion was not accepted earlier
ICAI had suggested increasing the limit of PPF investment in its pre-budget memorandum for Budget 2022 as well. However, the suggestion was not accepted. Union Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2023-24 on February 1, 2023, while the Economic Survey 2022-23 may be presented on January 31. In such a situation, if the limit of PPF is increased, then lakhs of people are going to get its benefit.