Paper on savings scheme exemptions

The finance ministry intends to prepare a discussion paper on the proposed introduction of EET (exempt at the stage of deposit, exempt at the stage of accumulation and taxed at withdrawal) to savings schemes like pension funds, provident funds etc. The discussion paper would be finalised after the Budget session of Parliament.

"The revenue department will hold consultations with the committee (Kannan committee on EET)and then prepare a consultation paper for wider discussions, before taking a view," a senior revenue department official said.

The general view in the department was that implementation of recommendations of the Kannan committee on EET should be gradual and in a phased manner.

Officials said the review exercise for the income tax Act was expected to be complete by April 31, 2006. The sub-groups which had been formed to review all 298 sections of the Act were working on simplifying its languages.