Earlier in February 2016, when the government announced the FY16 Budget, a lot of noise was raised regarding one particular focus – interest rates. There was plenty of furore created as Jaitley first decided to normalize EPF investments by taxing the funds at exit (in my view, this was a step in the right direction. Considering our financial markets have to develop as the years go on, providing a risk-less extra return on one asset class heavily distorts people’s investment objectives). Of course, he has since retracted those moves amid much public angst and show of dissent. What about the other measure? We are of course, referring to linking the rates on Small Savings (SS) Schemes , to the market rates. The Finance Ministry announced some radical measures around the rates that various Small Savings Schemes currently offer. Related Links: Budget 2016: Small Savings Schemes: Interest Rates Slashed! Clearing the Confusion on How EPF is Taxed at Exit in Budget 2016 Update from Finmin: PPF Is Not Taxable, But EPF Corpus is Taxable at Exit And More The products that are colloquially referred to as Small Savings Schemes include: Post Office Savings Bank accounts Public Provident Fund Post Office Time Deposits (1-yr, 2-yr, 3-yr and 5-yr) Post Office RDs Kisan Vikas Patra Sukanya Samriddhi Accounts National Savings Certificate among others.… (Read On…)
[via Capital Mind]
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