Last Updated on February 1, 2020 at 8:08 pm
The new tax regimen has many worried. Their favourite tax saving instruments are out of the equation if they choose the new tax regimen – which is beneficial for some and not so for others. See example links below. If you choose the new tax regime, will the interest earned from PPF, EPF, SSY taxable?
Short answer: The interest earned from PPF, EPF, SSY, gains from NPS are not taxable if you choose to be taxed under the new tax regime. So what has changed? You cannot use for saving tax. This means, your taxable income will become higher in the new tax regime and may or may not be subject to more income tax.
So in the old tax regime, PPF, SSY, EPF and the withdrawable portion of NPS are EEE instruments and in the new tax regime, they become TEE (taxable-exempt-exempt).
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To decide which regime to choose, see examples here: New tax regime (section 115BAC): you cannot avail these deductions! Also this video