The new financial year in India has started on April 1. It is that time of the year, wherein salaried individuals will be asked about their investment plans so that employers can deduct taxes in an planner manner till next March.
Investors should note that the Centre has numerous opportunities for savings and expenses through the Income Tax Act, which can significantly reduce tax liabilities and increase savings.
Investing in tax-saving schemes is essential for financial planning. These schemes maximize tax benefits, aiding in achieving financial goals and boosting disposable income. Strategic management of such investments is key to long-term financial success.
Some of the popular government schemes that can earn handsome returns are the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS), and National Saving Certificate (NSC).
Investors in the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS) and National Saving Certificate (NSC) are required to submit two key documents, Aadhaar and PAN, to the accounts office of the respective financial institution. The account will become dormant if these documents are not submitted within the specified period.
The Centre has made it mandatory to provide Aadhaar for investing in these small savings schemes. To open a new account in any of these schemes, the applicant’s Aadhaar card details are required. As per a notification issued last year, an individual needs to submit Aadhaar, issued by UIDAI, and PAN as proof of identity and address for account opening. If an account holder has not submitted his Aadhaar to the accounts office, he must do so within six months from April 1, 2023. Failure to do so will result in the account becoming non-operational.
In a notification dated April 3, 2023, the Ministry of Finance said: “As per the Government Savings Promotion General (Amendment) Rules, 2023, an individual shall also submit to the Accounts Office, the following identity documents containing proof of identity and address for the purpose of opening an account, namely (a) the Aadhaar Number issued by the Unique Identification Authority of India.”
“And in the event of failure of the depositor to submit the Aadhaar number within the specified period of six months, his account shall cease to be operational till the time he submits the Aadhaar Number to the Accounts Office,” the notification added.
Regarding PAN, an investor is given two months to submit it if not provided at the time of account opening. The account will become non-operational if the PAN is not submitted within the specified period of two months, under certain conditions specified in the notification.
“In the event of the failure of the depositor to submit the Permanent Account Number within the specified period of two months, his account shall cease to be operational till the time he submits the Permanent Account Number to the Account Office,” the Ministry of Finance said in the notification.