BackBudget 2022: PPF explains how raise in Section 80C of income tax can relieve a common man
Budget 2022 expectations: The ICAI has suggested Narendra Modi government to raise limit of Section 80C of income tax act from ₹1.50 lakh per annum to ₹3 lakh
PremiumBudget 2022 expectations: As it is less than 48 hours for Union Finance Minister Nirmala Sitharaman to present her 4th general budget in the parliament, common man or Indian middle class is anxiously waiting for the income tax reliefs being suggested by the Institute of Chartered Accountants of India (ICAI) is met or not.
The ICAI has suggested Narendra Modi government to raise limit of Section 80C of income tax act from ₹1.50 lakh per annum to ₹3 lakh whereas it has also advised the Ministry of Finance to raise annual Public Provident Fund (PPF) deposit limit from ₹1.50 lakh to ₹3.0 lakh. ICAI strongly believes that raise in annual PPF deposit limit would boost domestic savings GDP and it will help Indian government contain the soaring inflation, which is a major concern for current global economy.
PPF calculator
If this ICAI suggestion is met on 1st February 2022, PPF account holders will be able to invest double from their current annual limit of ₹1.50 lakh in single financial year. Apart from this, it will be 100 per cent 'EEE' means completely exempted from any income tax outgo on investment, PPF interest earned and PPF maturity amount after the lock-in period of 15 years. As PPF account can be extended in block of 5 years for infinite number of times, PPF calculator suggests that one can become a crorepati by investing ₹3 lakh per annum in one's PPF account for 20 years. The calculation has been kept keeping current PPF interest rate of 7.10 for the entire period.
In current scenario, if a person invests ₹1.50 lakh per annum for 20 years, the assuming current PPF interest rate of 7.10 per cent, one will be able to get PPF maturity amount of ₹66,58,288.
However, in the case of Narendra Modi government agrees to implement the ICAI suggestions in budget 2022, doubling Section 80C and PPF deposit limit, in that case a person will be able to invest up to ₹3 lakh in one's PPF account in one financial year leading to doubling of one's PPF maturity amount.
PPF account would make you a crorepati
So, in case of Union Finance Minister Nirmala Sitharaman doubles Section 80C limit and PPF deposit limit, one will get PPF maturity amount of ₹1,33,16,576 ( ₹66,58,288 x 2) after investing ₹3 lakh per annum for 20 years.
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