You must Sign In to post a response.
  • Category: Miscellaneous

    Is it true that PPF may also be taxed?

    Some members who are very much aware of the trends in investment vehicles may please answer this question. There is a rumor in some circles that the Government is now thinking of taxing PPF, the only superb scheme, which is not taxed at any stage, till now.

    Some Chartered Accountants are advising people to switch over to the ELSS vehicles only because in the post-election scenario, in 2019, there is going to be an announcement that PPF will also be taxed at the time of withdrawal after 15 years.

    Is there any move in this regard? I do not read any financial investment magazine. Nor am I updated on such matters. Is this only a rumor or is there is some move from the Government?
  • #651124
    I also have heard about this that PPF is going to be taxed but not sure if its going to happen or not.

    If its true then it would be sad as many of us invest in PPF to exempt income tax.


    " It is better to be hated for what you are than to be loved for what you are not" ... Andre Gide

  • #651129
    I do not think so. While the government earns a good interest for our PF amount held with them, how can they think of taxing them at the end? No chance.
    No life without Sun

  • #651135
    This may be a rumour only and may not come true as Govt has a very huge deposits mobilised under this scheme. Also, Govt is raising very good deposits under it which it needs for expenses for developing the country.

    Even if Govt decides to tax the withdrawal proceeds it will be effective for the deposits after a certain date so that the earlier deposits are not affected. Further, if Govt feels to tax it then they will have to come out with a nominal rate which may not affect the depositors much. So it is not so simple that Govt will just tax it without considering the pros and cons.

    Another aspect is what you have earned in PPF is the interest only. Capital is already yours. So Govt can take tax only on our earnings which is the tax part.

    I remember long back there was a scheme called NSS in which the withdrawal amount was taxable. The scheme flopped and failed miserably and was not able to raise deposits in the later phase and had to be closed.

    Any hasty decision from the Govt in this regard will also flop this flagship scheme and it is unlikely that Govt will take such a step.

    Knowledge is power.

  • #651143
    There is no proposal of imposing tax on Provident Fund. The rumour is being spread by some people in financial markets to lure people from PF to ELSS and NPS. PF is always tax-free (Investment+Interest+Final Amount) and also can't be attached by the Court.
    Beware! I question everything and everybody.

  • #651368
    PPF is completely tax exempted. The money you have saved in PPF up to one lakh fifty thousand rupees is exempted from the income tax. The interest that will be paid is also tax-free. This is the position as on today and all the news mentioning about tax to PPF are only rumours.
    always confident

  • Sign In to post your comments