Budget 2015: Hike exemption limit in PF, PPF, says an entrepreneur

For those keen on saving for tomorrow, the cap of Rs 1.5 lakh in saving instruments like life insurance, pension, interest on housing loans, tuition fees, PF, PPF etc. taken together, is a complete dampener. And for a first generation entrepreneur like Shipra Bhutani, it is no different. This time she has a simple expectation from the Budget – an increase in the cumulative slab of these saving instruments.

In the last Budget, the government had increased the slab by Rs 50,000 from the existing Rs 1 lakh bringing cheers to many but still it isn’t sufficient. A higher level of savings will allow Bhutani to invest in her academy and have money left over to buy a laptop for her 13-year-old son. With reduced options, the incentive to save for old age is also limited.

“When I am old the government is not going to provide any social security to me. What will happen to me? So please when I am earning, when I am capable of saving for tomorrow, let me save something for my old age,” Bhutani told CNN-IBN.

Bhutani feels that since she is not going to get any pension in future, she should be allowed the opportunity to be secured financially 20 or 25 years later in her old age. In such circumstance, people in her category seek the investment cap to be increased from Rs 1.5 to Rs 3 lakh for such saving tools.

“If the government increases this slab whatever the investments the people in India are going to make, trust me, the majority of them would be in government bonds, government securities and government projects or LICs. So what will happen is the same money would be available in the kitty of government which they can use in whichever way they want to. Thus increasing the slab will be a win-win situation for both of them,” she said.

Explaining how it would be mutually helpful if the limit was raised, Bhutani said, “For the government also they end up having more money in terms of savings from the people and investments. We as an individual, as an entrepreneur, as business people would be happy because now we can plan in a better way. I can have more disposable income at my place.”