Union Budget 2022: Experts Hope Annual PPF Deposit Limit, Deduction Under 80C To Increase

Those demanding an increase in the PPF deposit limit say it is the safest tax-saving scheme available for the self-employed.

Union Budget 2022 | Representative Image

Budget 2022: The Union Budget, in some way or the other impacts the lives of almost every section of society. And expectations from the Union Budget 2022-2023 is not any different. From government employees to businessmen, everyone is waiting to see what the government has in store for them when the budget is presented in the Parliament tomorrow.

For instance, PPF investors are expecting Finance Minister Nirmala Sitharaman to increase the maximum deposit limit fixed under the Public Provident Fund (PPF) scheme. At present, a person can invest up to Rs 1.5 lakh per year in a PPF account. This deposit is also eligible for tax deduction under Section 80C of the Income Tax Act.

Many experts believe that the annual deposit limit of PPF can be increased to Rs 3 lakh in the Budget 2022. Demands are also being made to increase the deposit limit of Section 80C to Rs 3 lakh.

If the government accepts the requests, then in one year, under 80C, the investors will get a tax exemption of Rs 3 lakh instead of Rs 1.5 lakh. Since 2014, the current deposit limit of Rs 1.5 lakh per annum has remained unchanged.  

Those demanding an increase in the PPF deposit limit say it is the safest tax-saving scheme available for the self-employed. Salaried employees have the option to invest in various provident fund schemes. But the non-salaried and self-employed have only PPF as a long-term investment plan in which tax can be saved by investing.

Highlights Of Public Provident Fund

• At the moment, 7.1% is the rate of interest on the PPF account. The government reviews the rates every three months which may either increase or decrease.
• A PPF account can be opened with a minimum of Rs 500. Once every year,  this amount has to be deposited to avoid incurring fines and the account being closed.
• The maximum amount that can be deposited in the  PPF account in a fiscal year is Rs 1.50 Lakh
• This scheme is for 15 years, and money cannot be withdrawn in between before completion of the scheme duration. But it can be extended for 5-5 years after 15 years.