PPF in 2022 budget: The investors and tax experts hope


The public provident fund (PPF) scheme in 2022 budget, investors and the tax experts hoping pave the way for an increase in the maximum deposit limit. Presently individual can deposit into the PPF up to Rs 1.5lakh per year.

Deposit of 1.5 lakh is the present case and the experts hope for an increase revision within the PPF yearly deposit limit to Rs 3 lakh in the upcoming budget.

The yearly deposit amount of 1.5 lakh per year has not been revised since 2014. Hence, experts believe it requires reconsideration. PPF deposit limit increase is necessary in present times because it is only safe savings scheme available for self-employed assesses.

The various option to invest in provident fund schemes have the salaried employees. the other case of non-salaried and self-employed have only PPF as a long term investment scheme also that guarantees tax- free return.

the reason of suggestion to increase the celling of PPF contribution to Rs 3 lakhs only the safe and tax efficient option available for self-employed assesses is PPF if PPF deposit limit is raised to Rs 3 lakh, assuming the current rate of seven.1%interest on PPF deposit and individual can get around Rs 40lakh in 15 years.

Investors are allowed to extend their PPF account in blocks of 5 years each after the mandatory 15 years maturity period. If the deposit limit is 3lakh per year, the investors may get over Rs 80 lakh from PPF after 15 years.

It remains to be seen whether the expecting change in the upcoming budget will fulfil this long standing demand of PPF investors and tax experts. Also needs to consider some. Social securities that inflation, people when they are aged. The limit may be increased further as deemed suitable.

While the assesses in employment with matching contribution from employers, 12% of compulsion of saving in their salary that is only safe and tax efficient option available for self-employed assesses is PPF. It’s also reflects the reason for the suggestion to increase the selling of PPF contribution by Rs 3lakhs.

The above suggestions are given by the institute of chartered accountants. Increase of contribution 3 lakh may also boost the domestic savings as a percentage of GDP and will have an anti- inflationary impact. Also, the ICAI said that the present limit of Rs 1.5 lakh has not been increased for several years and requires reconsideration.

The revised monetary limit will help in increasing the savings of individuals and is necessary keeping in sight the rate of inflation.

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