PASSAGE 31

The salaried class expressed their discontent over tax on PPF scheme, the government has finally withdrawn the proposal. The government said the PPF will not be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 1 will be taxed while principal will continue to be tax exempt. Revenue Secretary Hasmukh Adhia said, “The principal amount will not be taxed and will continue to remain tax exempt on withdrawal. What we have said is 40 per cent of the interest accrued on contributions made after April 1 will be tax exempt and its remaining 60 per cent will be taxed.” Adhia said that no part of PPF will be taxed and the present scheme of investment up to Rs 1.5 lakh in a year will continue to be tax exempt. PPF on withdrawal will continue to be out of the tax ambit.

1. Why the government has withdrawn the PPF proposal scheme?
A) Due to discontent of salaried class
B) Due to discontent of business class
C) Due to discontent of student class
D) Due to discontent of ministerial class

2. What was the new tax proposal made by the government?
A) PPF will be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 1 will not be taxed.
B) PPF will be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 1 will be taxed.
C) PPF will not be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 1 will be taxed.
D) PPF will not be taxed on withdrawal and only the interest that accrues on contributions to employee provident fund made after April 10 will be taxed.

3. Which part of employee provident fund will continue to be tax exempt?
A) 60 per cent of the interest accrued on contributions made after April 1 will be tax exempted.
B) 40 per cent of the interest accrued on contributions made after April 1 will not be tax exempted.
C) Investment up to Rs 1.5 lakh in a year will continue to be no tax exempt.
D) Principal will continue to be tax exempt on withdrawal.

4. When PPF will continue to be out of the tax ambit?
A) Deposit B) Withdrawal
C) Transfer D) Closed

5. According to the government how much will not be tax exempt?
A) 40% of the interest accrued
B) 60% of the interest accrued
C) investment up to Rs 1.5 lakh in a year
D) None of these

Answer Key

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