As per the Finance Minister's speech, which I have reproduced below, it is proposed to move to EET for saving schemes and for this financial year nothing is changed so your statements: "It can be guessed here that only the future investments will be taxable.Why? Because you must understand that nothing can be said conclusively unless the bill is enacted in Parliament and becomes a law. Let's wait and see!" are totally incorrect.
Please see, what FM is saying in his speech:
157. Tax treatment of savings is a complex issue but we can benefit from the best international practices in this regard. We have already introduced EET-based taxation in the defined contribution pension scheme applicable to newly recruited government servants. Before we fully migrate to the EET system for all kinds of savings, it is necessary to resolve a number of administrative issues. Hence, without making any change for the present, I propose to set up a committee of experts that will work out the road map for moving towards an EET system.
So this committee of experts will propose how to move to EET and that too will be applicable from next financial year - 2006-2007.
When we see it from single point of view it is felt that whatever government is doing is wrong. But, I personally feel that it has to be taxed as income has to be taxed atleast one time.
All PF contributions made previously have already got tax benefit so, it can't get away from tax.
My view would be to treat it like a capital gain and tax it after considering inflation in to calculation.
i presume how will hv to handle some many taxes ,tds,service tax income tax ,vat ,eductaion cess & know twaxes on the return of invetsmnts and god knows what all. i hv a question to all the learned people who are imposing these taxes to tell us where all this end & teh money collected by them is being utilised where?the constituion of India says that the govt is for the people ,by the people & of the people but i am sorry to say that the govt seems to be by the politicians for the politicians and of the politicians. god knows how a common man will survive ? everbody should come together & make the poloticians undersatnd that the common man will not take it any more. WE should hv somebody like Anil Kapoor in NAYAK film doing justice to common man It is only the common man who will suffer becos the poor will become poorer and richer more richer .
It is too funny idea to tax ppf on final withdrawal after 15 year. The one who had just completed 15 years it is a shock because 15 years ago the contract was not to tax ppf at the time of withdrawal. highly nonsense suggestion. if at all it has to be taxed it can only the new accounts and the contributions to ppf made from financial year 2005-06.
I dont think there is anything in the budget for taxation of PPF, the only thing mentioned about this was in the Finance Minister's speech. No suh proposals in the Finance Bill to be passed, so nothing will change immediately, until this amendment is made.
Your Article on PPF being taxable on withdrawal is a lot of bunkum.Please refrain from creating panic with innocent law abiding citizens like us. Hundreds of thousands of people like me will go to court, if the government acts like this in a mala-fide intentions. The Govt. will have to close the existing scheme of 1968 and then start a new PPF scheme 2005 for the EET.
Dear sir as i understand, that Principal amount of ppf is taxable after certain years ( deferment of income tax). my querry is that, I saving is 1.75 lacs, out of which 70000.00 is HBA principal payment, 40000.00 is EPF, 10000.00 LIC, 10000.00 is pension, 12000.00 education, rest is saving in PPF account. Herte I saved in PPF account is due to Interest benefit( Higher Interest) not for Tax Benefit. I already given Tax on PPF principal as it is more than 1.0 Lacs. Will I have to pay again tax on Principal Amount at the the of withdrawl i.e. I have to pay tax two times on same principal. Kindly Clarify. Regards sanjay
