The government operates a variety of programs for the benefit of the populace. Through these programs, the country’s common inhabitants benefit greatly. Additionally, the government also collects income tax. However, the government also offers a variety of exemptions to the public in order to grant income tax exemption. Today, we’re going to discuss one such exemption that the central government offers, allowing for the acquisition of a tax exemption.
Government provided funds
Actually, the Public Provident Fund (PPF) is the name of the program we are discussing. Through the Public Provident Fund, one can invest, save, and reduce taxes. When filing an ITR under Section 80C of the IT Act, a person who invests money in this plan will receive a yearly exemption of up to Rs 1.5 lakh. People can avoid paying taxes in this circumstance up to Rs 1.5 lakh per year.
Outdated tax laws
However, a person who files an ITR under the previous tax system will be eligible to use this exemption. After filing an ITR under the new tax law, individuals will not be able to benefit from this program. An individual has the choice of which tax regime to submit his ITR under.
Long-term gain
The government also pays interest on PPF. At the moment, this program offers 7.1% interest. In contrast, a person who invests in this plan will receive a maturity benefit after 15 years. People will gain from the plan in this case over the long run as well. People can invest a maximum of Rs. 1.5 lakh in this program each financial year.
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