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Domestic savings are crucial, both for the national economy as well as for the people who save, particularly during recessionary times. This was proved once again, wherein unlike many Western countries, India remained fairly insulated from the recent global economic slowdown due to its relatively high level of savings. Ideally one should save 20-30 percent of his earning for future needs. For salaried people, savings are forced ones, thanks to tax saving plans. While in .. Full Article

Under the DTC Bill, the annual deduction has been raised to Rs. 1.5 lakh. From the bill It appears that investments in PPF, PF, NPS, pure life insurance policies, savings schemes as notified by the government are eligible for this deduction under EEE category. Full Article

Individuals and companies can expect some relief in the Direct Taxes Code (DTC), with the government planning to widen personal income-tax slabs, enhance the exemption limit and remove levies on corporate tax. This comes with the Cabinet clearing the Direct tax code which will be introduced in Rajya Sabha, and referred it to a select committee, during the monsoon session. Full Article

EET :EET will not include Government Provident Fund (GPF), PPF, Recognised Provided Funds, Pension Scheme administered by Pension Fund Regulatory and Development Authority as well as approved pure life insurance products and annuity scheme. These will be governed by EEE. Full Article

The New Pension Scheme (NPS) for the unorganised sector got a much-needed fillip with the revised discussion paper on the Direct Taxes Code proposing that the end proceeds under this scheme be exempt from tax. Under the existing tax structure, the maturity proceeds under the NPS are taxed. That is, an EET (exempt-exempt-tax) method is followed. This put the scheme at a disadvantage vis-a-vis other savings instruments where the exempt-exempt-exempt (EEE) method was fol.. Full Article

Tax treatment of savings:-The DTC has proposed contributions up to Rs 3 lakh in a year (both by employer and employee) to any account maintained by a permitted savings intermediary be exempt from tax, and would remain untaxed if it remained in that account. Withdrawals are to be included in income from residuary sources, and taxed accordingly. Full Article

Currently Ulips come under the EEE (exempt exempt exempt) regime when it comes to taxation. What this means is that the money invested in an Ulip is tax exempt, the returns earned during the tenure of the Ulip are tax exempt and the amount received at maturity is also tax exempt. Full Article

One of the contentious provisions proposed by the DTC was the introduction the EET regime wherein long-term saving schemes (i.e. Government Provident Fund, Recognised Provident Fund, Public Provident Fund, Life Insurance etc.) were to be taxed at the time of withdrawal from such schemes. Full Article