ICAI has said that if the government increases the investment limit in PPF, it will boost the domestic savings rate. Higher savings rate will help in combating inflation.
Income tax rebate is available on investment in PPF. Now the Institute of Chartered Accountants of India (ICAI) has demanded that the government increase the annual investment limit in PPF to Rs 3 lakh in the budget of 2021-22. Right now you can invest only one and a half lakh rupees in a financial year in PPF.
PPF is the best option for non-paid people
The ICAI has said that the employed people contribute to the EPF, in which the employer company also contributes 12 per cent on its own behalf to the employee. But there is no EPF for self-employed entrepreneurs and professionals. They have to invest only in PPF. That is the only tax saving option for them. But you can invest up to one and a half lakh rupees in it. Therefore, to give benefit to such people, the government should increase the investment limit in PPF to Rs. 3 lakh.
Increasing the limit of investment in PPF will increase the domestic savings rate
ICAI has said that if the government increases the investment limit in PPF, it will boost the domestic savings rate. Higher savings rate will help in combating inflation.
The institution has also said that deduction limit under 80C should be increased from Rs 1.5 lakh to Rs 2.5 lakh. This will boost the tendency of people to save. People will invest more money in tax savings instruments.
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