RBI has released a Notification on interest rates on two popular Tax saving schemes WEF 01.04.2014. These schemes are Public Provident Fund Scheme 1968 and Senior Citizens Saving Scheme 2004. PPF is most popular tax saving scheme among small investor as interest from PPF account is exempted from income tax. SCSS scheme is useful for senior citizens either having income less than exemption limit or falling under first slab of income tax rates.
First-time homebuyers can avail an additional income-tax deduction, till March 31 this year, of up to Rs 1 lakh paid as interest on a loan amount of less than Rs 25 lakh for a property value of not more than R40 lakh. For the deduction to be availed, the loan has to be sanctioned between April 1, 2013, and March 31, 2014.
Withdrawal of Provident Fund may attract Income Tax. The Income Tax Department recently told EPFO (Employees Provident Fund Organisation) to deduct Tax (TDS) from the withdrawal amount, if the withdrawal happened before completing five years of subscription. Tax officials have cited a rule in the 1961 Income-Tax Act that taxes PF withdrawals by employees before completing five years of contributions into the EPF is taxable.
Section 80D of the Income-Tax Act, talks about the deduction in respect of premium pad towards a health insurance policy for self, spouse, dependent children and parent.
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Tarun Kumar Gupta
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