Tax

Indian Savings Tax to be Streamlined

Paul Das 30 September 2005

Indian Savings Tax to be Streamlined

A roadmap for streamlining the tax structure to apply to all of India's savings instruments will be introduced next month, according to the head of the committee examining the issue, R Kannan of SBI Life Insurance. The committee’s objective is to define ways of bringing uniformity to the tax treatment of all savings schemes according to the “exempt-exempt-taxed” model, as proposed in India's last budget. The idea behind the EET model is to exempt savings from tax at the contribution and accumulation stages, but tax them at the withdrawal stage. The committee is looking at 90 short-term and all long-term saving instruments, including provident funds.

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