Small Savings Schemes: The deadline for filing income tax returns for the financial year 2023-25 was till July 31. During this period, 7.28 crore people have created a new record by filing Income Tax Return. This figure is 7.5 percent more than the 6.77 crore ITRs filed in the financial year 2022-23. While releasing the data, the Finance Ministry has also informed that 5.27 crore (72 percent) people have filed returns under the New Tax Regime. However, this figure is proving to be very harmful for the Small Savings Scheme.
The youth coming under the new tax regime are turning away from these saving schemes
With the increasing popularity of the new tax regime, there has been a huge decline in the collection and subscriber numbers of many popular savings schemes. The youth coming under the new tax regime are now turning away from these savings schemes. Since, deductions are not available from this like the old tax regime. In such a situation, enthusiasm for these schemes is decreasing among young investors. Sources say that due to the new tax regime, money is now coming less in small savings schemes. Schemes like Public Provident Fund (PPF), Sukanya Samriddhi Account and National Savings Certificate are now getting weaker.
Preferring to invest in equity instead of savings scheme
An official told Business Standard that people are now preferring to invest in equity instead of savings schemes. However, these schemes are still giving higher interest and safe returns. But, the interest received in these schemes is reviewed every quarter. Apart from this, tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act is available only in the old tax regime. Official data till the year 2022 shows that the deposit in the PPF scheme was Rs 5,487.43 crore in 2013-14. It has increased by 134 percent to Rs 12,846 crore in 2021-22. However, now the government is apprehensive about less money coming into the small savings scheme in the current financial year.
Mahila Samman Savings Certificate may be discontinued
According to sources, deposits in these schemes may decrease by about 8 to 10 percent in the financial year 2025. Collection in Senior Citizen Savings Scheme has almost tripled to Rs 1.12 lakh crore in the last financial year. Its subscribers have also increased. However, no major increase is expected in this either. It is feared that under the Mahila Samman Savings Scheme, the government will not extend the Mahila Samman Savings Certificate beyond March 2025. The central government has also reduced the collection target of the National Small Savings Fund to Rs 4.2 trillion in the financial year 2025. This is less than Rs 4.67 trillion of the interim budget.
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