Prasad Patil
The benefit of standard deduction to regular salaried and pensionable employees has been retained in both the tax systems. Currently, this standard deduction is 50 thousand rupees. Also, if you have recently decided to opt for a new tax slab, you need not panic. Even under this arrangement, the interest accrued in the Public Provident Fund account will remain completely tax-free. It should be noted that in the new tax system, there has been a change in the deduction and there is no change in the exemption.
Under the old tax regime, taxpayers get the benefit of various investment and expenditure deductions under Section 80C. It includes the investment in 'PPF' and the interest earned on it. Of course, the option of deduction under 80C has been removed in the new tax regime. Due to this, many people were worried about whether the interest accrued in the PPF account will be taxed.
Discounts in the new tax structure
According to experts, it is important to know the difference between exemption and deduction in the new tax slab. The interest earned on 'PPF' comes under the concessional category. At the same time, the profit received under 80C comes under the ambit of deduction. In the new tax regime, the option of deduction under 80C has been removed; However, the current discount has been maintained. This means that you will not have to pay any tax on the interest earned on the PPF account. People who accept the new tax slab will continue to benefit from it. The main change in the new tax slab is related to deductions. E.g. The new tax structure excludes deductions under section 80C (ELSS/life insurance premiums etc.), deductions under section 80D (mediclaims etc.) and deductions on home loan interest etc.
Standard Deduction
The benefit of standard deduction available to salaried and pensioners has been retained in both tax slabs. The current standard deduction is Rs 50 thousand. All this means is that whether you opt for the new tax slab or the old regime, the interest earned in the 'PPF' account will be tax free.
