The tax free savings account had started barely 18 months ago and the people are flooded with the warning letters. The notices are in regard to the penalty taxes and overpayment and consequently, the Canadians have become angry.

Around 72,000 of such letters were dispatched by the Canada Revenue Agency to the TFA holders on June 1. These letters have been sent in the wake of information received by the CRA from financial organizations. The customers have to pay the taxes by June30, as after that they will have to face a penalty.

As a result, panicky customers are making numerous calls to these financial organizations. Therefore, the CRA and the industry had a conference call, yesterday.

It is strange that so many people have the risk of facing penalties due to the over contribution. TFSA was started with the purpose of giving the people the best saving options possible, where no tax would be levied.

The schemes started in the year 2009 and since then, they have been a hit with the people of the country. The reason behind it is that they are beneficial for people of all income groups.

Under this scheme, a Canadian who is above the age of 18 can make a payment of up to $5,000 a year. If the person did not make the payment in the previous year, then he can do it next year.