The investing community as well as tax-experts from the upcoming Budget 2022 expect an upward revision in the annual contribution limit towards PPF or Public Provident Fund. Currently the same is pegged at Rs. 1.5 lakh annually and offers tax deduction under Section 80C of the Income Tax Act.
There is a view that the PPF annual deposit limit should be hiked to Rs. 3 lakhs. The increase on the same is sought as there has been no revision on it since the last 7 years.
Furthermore, experts have called for a hike in the Section 80C limit to Rs. 3 lakh from the current Rs. 1.5 lakhs. Under section 80C, various investments into insurance, post office schemes etc offer tax deduction up to Rs. 1.5 lakh. Besides, there are other expenses and repayments that also come within the ambit of Section 80C.
Why the call to raise PPF annual deposit limit?
As per the ICAI- the country's largest professional accounting body the hike in PPF annual limit is sought as currently PPF is the only safe and tax efficient post office savings scheme that is available to self-employed taxpayers.
"The only safe and tax-efficient option available for self-employed assessees is PPF. Hence, the suggestion to increase the ceiling of PPF contribution to Rs 3 lakhs," said the accounting body in its pre-budget memorandum.