Rs 3 lakh Income Tax Exemption Top Expectation From Budget 2021
Experts and individuals are hoping that Finance Minister Nirmala Sitharaman will raise the Income Tax deduction limit under Section 80C of the Income Tax Act up to Rs 3 lakh in the upcoming Budget. Currently, under Section 80C, a deduction up to Rs 1.5 lakh can be claimed for investments made in various instruments like PPF, five-year bank FDs, Provident Funds, Life Insurance premium paid etc. It is expected from upcoming budget 2021 that there should be an increase in the deduction limit of section 80C from Rs 1,50,000 to 3,00,000 p.a,”. This will boost more investment and eventually lead to the overall development of the country, Tax experts hope that this time the Government would be adopting a clear distinction between Long term and Short-term savings. He said that currently there is no major support in the tax policy to encourage long term savings, which is a need of this pandemic cycle. Life insurance and Pension funds are a major source of savings for long term purposes. This time we can expect that the Government would consider the separate exemption limit for both of them apart from section 80C. Some industry professionals are also expecting favourable policies to boost the real estate demand, including an increase in the exemption for principal repayment on home loans. Also, the exemption for principal repayment on home loans should match the HRA limits for salaried class. Individual taxpayers are hoping for personal tax relief in the budget. Majority population wants the ‘widening of the tax slabs’. A survey result shows that ‘timely receipt of refunds’ was a key challenge faced by as many as 52 per cent of the respondents. This was closely followed by ‘tax compliances’ and ‘tax litigation’ with 49% and 43% of the respondents respectively stating the same.
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