All savings, including mutual fund schemes, fixed deposits, and small savings schemes, could come under the proposed taxation method of exempt-exempt-tax.
The ministry of finance has constituted a five-member expert team whose mandate would be to work out a roadmap for moving towards the EET method of taxation of savings.
Chairing the committee, R Kannan, appointed actuary of SBI Life on deputation from the Reserve Bank of India, said: "All savings instruments, including mutual funds and fixed deposits in addition to small savings schemes, will be looked into."
The mandate outlined to the committee does not identify any particular savings instrument. The term "savings instruments" could even mean savings in bank accounts.
"We have to take into account both from the savers and government's point of view. In the case of savings, decision taken should optimally increase savings. The government, of course, would like to increase revenue through taxation. Hence the idea is to offer concession and at the same time increase total savings, even if this means decreasing the tax rate," said Kannan.
If the government decides to include more savings instruments under EET, it will offer greater scope for individuals in terms of exemption at the time of contribution.
