If you have invested in schemes like PPF and have opted for the new tax regime, will the income earned from PPF returns be taxed or not? Under the new tax regime, there is no tax exemption on investment in PPF scheme.
PPF scheme: People have many questions about Income Tax. Especially there is a lot of confusion about the new tax regime and the old tax regime as to which tax regime should be selected when. Especially when you have invested in government schemes and insurance schemes and have also taken a home loan, some people also have queries about tax deduction.
Here is the answer to one such confusion. If you have invested in schemes like PPF and have chosen the new tax regime, will the income from PPF returns be taxed or not? When under the new tax regime, there is no tax exemption on investment in PPF scheme. Let us know the complete details.
Will PPF interest also be taxed?
According to Business Today, all the existing exemptions on PPF interest are unchanged. This is a tax free scheme and if you choose the new tax regime, no tax will be applicable on PPF interest. If you have invested in this scheme, then you can claim tax deduction by filing ITR under section 80C. This is exempted on your annual income. However, you have to ensure that you have chosen the old tax regime.
Standard deduction is applicable in both tax regimes
It is important to note that the standard deduction of Rs 50,000 available for salaried individuals and pensioners is applicable in both the new and old tax regimes. This means that whether you choose the new tax regime or the old tax regime, the interest income from your PPF account will be tax free.
No tax is required on income of Rs 7.5 lakh
It is worth noting that under the new tax regime, the government has given tax exemption on annual income up to Rs 7 lakh. Whereas under the old tax regime, no tax is required on annual income up to Rs 5 lakh. After this, a standard deduction of Rs 50,000 is applicable. If the income is more than this, tax is applicable under different tax slabs.
