Union Budget 2025: The Union Budget for 2025 is set to be unveiled on February 1 this year. Analysts anticipate that this budget will significantly influence popular small savings schemes, including the Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY). There are expectations of potential adjustments in tax regulations and interest rates.
These savings schemes hold great importance for small investors, offering more than just financial gains. The tax advantages and backing from the government make these instruments vital for encouraging long-term savings. In a recent update from December, the central government opted to maintain the interest rates for various small savings schemes for the fourth consecutive quarter, covering the January to March timeframe.
Can we expect any changes in terms of interest rates?
Experts suggest that with inflation on the rise and shifting economic priorities, many investors are exploring alternative options that promise higher returns without the constraints of conventional savings schemes. There is speculation that the interest rates for PPF and NSC may be revised, and the government might also consider adjusting the tax slabs to provide relief to the middle class.
Current small savings schemes include the Post Office Savings Account, National Savings Term Deposits (1, 2, 3, and 5 years), National Savings Recurring Deposits, National Savings Monthly Income Scheme Account, Senior Citizen Savings Scheme, National Savings Certificate, Public Provident Fund, Kisan Vikas Patra, and Sukanya Samriddhi Account. These schemes guarantee returns ranging from 4% to 8.2% per annum and allow investors to claim an income tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.
Recently, the government has rolled out a new income tax regime featuring lower tax rates, with exemptions now being optional.