Budget 2017 should look to restore deduction under section 80CCF for an individual or Hindu Undivided Family for the investments made in long-term infrastructure bonds, recommends FICCI.
Budget 2017 should look to restore deduction under section 80CCF for an individual or Hindu Undivided Family for the investments made in long-term infrastructure bonds, recommends FICCI. In its pre-Budget 2017 memorandum, the Federation of Indian Chambers of Commerce and Industry (FICCI) says, “Section 80CCF was applicable to an individual or Hindu Undivided Family for the investments made in long term infrastructure bonds. Maximum deduction which was allowed was up to Rs 20,000. This deduction under section 80CCF was over and above the existing aggregate limit of deduction allowable under section 80C, 80CC and 80CCD of the Act. However, the said deduction was discontinued w.e.f. Assessment Year 2013-14.”
“It is recommended that deduction under section 80CCF of the Act should be continued and allowed for investments made by assesse,” FICCI says.
FICCI also wants that the Budget should look to make the National Pension Scheme (NPS) more tax-friendly and make it part of the EEE (Exempt, Exempt, Exempt) regime. According to FICCI, NPS should be moved to EEE regime, from the current EET (Exempt, Exempt, Tax), on the lines of other retirement schemes like Employee Provident Fund (EPF) and Public Provident Fund (PPF). FICCI believes that “in order to encourage taxpayers to make voluntary higher contributions towards NPS, it should be made more tax-friendly as the objective of this scheme is to create a pensionable society.”
Additionally, FICCI says, “the benefit of 40% exemption for withdrawal from NPS by any employee be extended to withdrawals by any person and not just employees. It is suggested the sub-section (12A) of section 10 of the Act providing for exemption of 40% of payment from NPS Trust to “an employee” on closure of account or opting out of pension scheme, may be modified to allow such exemption to payment from the NPS Trust to “an individual”, since exemption under the said clause is available in respect of withdrawals from NPS by self-employed individuals also.”
Budget 2017, which is likely to be presented on February 1, is widely expected to bring in cheer for taxpayers, especially in the backdrop of demonetisation of old Rs 500 and Rs 1000 notes.