Key Changes: Ensure Minimum Deposits in Savings Schemes
Are You Making a Deposit? Penalty if Not Deposited by March 31!
For the current financial year 2023-24, you have the option to choose a new tax regime for paying your taxes. If you opt for the new tax regime, while also having paid taxes under the old regime until the last financial year and invested in small savings schemes, you are required to invest in schemes like PPF, Sukanya Samriddhi Yojana, and NPS, just like every year.
If you have invested your money through PPF (Public Provident Fund), Sukanya Samriddhi Yojana (SSY), or National Pension System (NPS), this news is beneficial for you. Under small savings schemes, you must deposit a minimum amount in your account every financial year to keep the account active. Failure to deposit the minimum amount annually can lead to account deactivation and may also incur a penalty. The deadline for depositing the minimum amount in PPF, NPS, and Sukanya Samriddhi accounts for the current financial year is up to March 31, 2023.
The government has made the new tax regime more attractive in the 2023 budget. From April 1, 2023, the income tax slabs in the new tax regime have been revised, and the primary exemption limit has been raised from Rs. 2.5 lakhs to Rs. 3 lakhs.
Additionally, the standard deduction is also available in the new tax regime, allowing up to Rs. 7 lakhs of income to be tax-free.
Penalty for Not Depositing Minimum Amount:
In the current financial year 2023-24, you have the opportunity to choose the new tax regime for paying your taxes. Even if you choose the new tax regime, you are required to invest in schemes like PPF, Sukanya Samriddhi Yojana, and NPS every year as part of small savings schemes.
However, you cannot avail of tax exemption benefits on investments in these schemes under the new regime. Also, a penalty may be imposed for not depositing the minimum amount in these accounts.
How Much Money is Required for PPF Deposit?: According to PPF Rules 2019, a minimum of Rs. 500 must be deposited in the PPF account each financial year. Failure to deposit the minimum amount will deactivate the PPF account, rendering loan and withdrawal facilities unavailable.
You can revive a dormant account before maturity. If the account defaults, an annual fee of Rs. 50 will be charged, in addition to the requirement to deposit at least Rs. 500 every year.
Sukanya Samriddhi Yojana: A tax-saving investment option for those wishing to save for their daughters is the Sukanya Samriddhi Yojana scheme. According to the scheme’s rules, account holders must deposit a minimum of Rs. 250 every financial year.
If at least Rs. 250 is not deposited in the account during the financial year, the Sukanya account is considered a default account. The scheme’s rules allow for the revival of any default account before maturity. To revive an account, a penalty of Rs. 50 per default year must be paid.
NPS: Some taxpayers open a National Pension System (NPS) account to claim tax deductions under Section 80CCD(1B) by investing an additional Rs. 50,000, which is over and above the limit of Rs. 1.5 lakhs permitted under Section 80C.
According to NPS rules, every individual must deposit at least Rs.1,000 every financial year. However, if your account is inactive, you can reactivate it by depositing Rs. 500. It is important to note that you need to deposit at least Rs. 1,000 in a financial year.
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