Interest earned on PPF whether taxable

5195 views 2 replies
Sir / Madam,
I have a PPF account which is getting matured shortly.
Please clarify whether the interest earned after 31st March,2011 will attract Interest as per the New  Direct Tax Code?
Any of the present rules will get changed once Direct Tax Code comes into effect?
Thanks.
N.V.Mani
Replies (2)

As per new tax code proposed, accumulated balance in your PPF account as on 31st March 2011 will be exempt from tax (grandfathering clause). In other words, as per the direct tax code (DTC), only new contributions made on or after the commencement of the code will be subject to tax. It is not clearly spelt out in the DTC, but based on the interpretation of the proposed provisions, it seems that any further interest on this accumulated balance would be subject to tax.

Originally posted by : NV MANI

Sir / Madam,

I have a PPF account which is getting matured shortly.

Please clarify whether the interest earned after 31st March,2011 will attract Interest as per the New  Direct Tax Code?

Any of the present rules will get changed once Direct Tax Code comes into effect?

Thanks.

N.V.Mani

dont worry 

as per our discussions output ( though its not official yet and more clarification are awaited in this year) only ppf accounts opened after march 2012 will be ranked at par with EET formula, i.e deposit tax free, income tax free and withdrawl taxable. 

accounts opened in past years and still running would not be under EET  usually , but if they put it under EET then old balance would be exempted, however on imposition of such schemes, an exit plan would be offered to account holders with time in hand. 

let the DTC get notified 1st. 

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