Income Tax Return: Is government planning to increase Section 80C deduction limit? Here’s what we know

 

Section 80C of the Income Tax Act, 1961, is one of the most commonly used sections for claiming tax deductions. Under Section 80C individuals can claim deductions for certain investments and expenses. These included investments in pension schemes, PPF and life insurance, among others.   

In light of ongoing discussions about a potential rise in the exemption limit under Section 80C of the Income Tax Act 1961, the Finance Ministry has stated that no such proposal is currently under consideration. The clarification comes at a time when various groups have been demanding to increase the deduction limits under Section 80C for various investments.

Read More: GST Council Meeting Live Updates: Will Online Gaming Get Tax Relief?

For years, taxpayers and tax professionals have been pressing for a higher Section 80C limit. Even the Institute of Chartered Accountants of India (ICAI) suggested in its pre-Budget 2023 advice that the government should up the PPF deduction limit from Rs 1.5 lakh to at least Rs 3 lakh under Section 80C. However, the government hasn’t raised the limits so far. 

GOVERNMENT’S CLARIFICATION ON INCREASING SECTION 80C LIMIT

Union Minister of State for Finance, Pankaj Chaudhary, recently clarified on the matter responding to a question in Lok Sabha.

In a written reply in the Lok Sabha on July 31, he said, “The government’s stated policy is to simplify the Income-tax Act, 1961, by eliminating exemptions and incentives while concurrently lowering tax rates. Therefore, there’s no proposal to increase the exemption under Section 80C of the Income Tax Act under consideration.”

Read More: GST Council Keeps 28% Tax on Online Gaming, To Be Effective From Oct 1, Review After 6 Months

His statement came in response to a question about the need to update small savings plans and Section 80C exemptions, considering the changing economic climate.

DEDUCTIONS ALLOWED UNDER SECTION 80C  

Section 80C of the Income Tax Act, 1961, is one of the most commonly used sections for claiming tax deductions. Under Section 80C, individuals can claim deductions for certain investments and expenses. These included investments in pension schemes, PPF and life insurance, among others.   

Read More: Landmark GST Ruling! ITC Can’t Be Denied Automatically For Non-Payment Of Taxes By Supplier, Says Calcutta HC

Here’s the catch: the total amount claimable under Sections 80C, 80CCC and 80CCD (1) is capped at Rs 1,50,000. However, an extra deduction of Rs 50,000 can be claimed under Section 80CCD for contributions to the NPS.  

The valid investments under Section 80C include ELSS Funds, National Pension Scheme (NPS), Unit-Linked Insurance Plan (ULIP), Tax-Saving Fixed Deposits, Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Yojana, among others.

Comments

Post a Comment

Popular posts from this blog

Senior Citizen Train Ticket Discount: Government has issued a new statement regarding giving discount to senior citizens on train tickets, know the details here

Image
  Senior Citizen Train Ticket Discount: Once again a demand has been made in the Lok Sabha to give discount to senior citizens on train tickets. Senior Citizen Train Ticket Discount:  Railways has withdrawn the discount given to senior citizens on train tickets since the Corona period. However, from time to time there has been a demand to restore this concession given to senior citizens in trains. Even in the winter session of the Lok Sabha, some members raised the demand for increasing fare concessions and facilities for senior citizens traveling in trains. However, even before this, Railway Minister Ashwini Vaishnav has told in the Lok Sabha that during the train journey, every passenger is given an average subsidy of 53 percent on the train ticket. Apart from this, he also told who gets discount on tickets while traveling by train. Demand for discount in train tickets raised again During Zero Hour in the House, Janata Dal (United) MP Kaushalendra Kumar said that before the ...
Read more

Cash Transaction Rules: Income tax rules on cash transaction between Husband-Wife and Son-Father, know rules

Image
  Cash Transaction Rules: Income tax keeps an eye on our every transaction. But is there any tax on cash transactions or can Income Tax send a notice? Or how much cash transaction can take place between you and your wife or between father and son? If you also have these questions in your mind, then let us know their answers… If you also transact money between father and son or between husband and wife, then this news is useful for you. Actually, every transaction of ours has an eye on income. In such a situation, a question arises in the minds of many people whether income tax notice can be received even on cash transactions? Let us know how much cash transaction you can do in your family. Income tax sends notice? According to tax experts, if you give money every month for household expenses or give money as a gift, then the wife is not liable for income tax. Both these types of amounts will be considered as the income of the husband. The wife will not receive any notice from the I...
Read more

Have a Current/Savings Bank Account? Know the Cash Deposit Limits under Income Tax Act to avoid Penalties and Notices

Image
  Adhering to cash deposit and withdrawal limits is crucial to remain compliant with the Income Tax Act in India. This article aims to elucidate the various facets of cash-related regulations, encompassing savings and current accounts, fixed deposits, credit card bill payments, real estate transactions, and more.  Cash Deposit Limits in Savings and Current Accounts The Indian Income Tax Act imposes specific regulations on significant cash deposits in savings accounts. Individuals accumulating INR 10 lakh or more during a fiscal year must notify tax authorities.  For current accounts, this threshold is set higher at INR 50 lakh. Although not immediately taxed, financial institutions report transactions exceeding these limits.  Cash Withdrawal and TDS under Section 194N  Section 194N outlines TDS rules for cash withdrawals. A 2% TDS is levied on withdrawals exceeding INR 1 crore within a fiscal year. Non-filers face a 2% TDS on withdrawals over INR 20 lakh and a 5...
Read more