Income Tax Overhaul: Need to Boost Deduction Limits Under Section 80C!

In the upcoming Interim Budget 2024, experts suggest that Finance Minister Nirmala Sitharaman should prioritize providing relief to taxpayers. A recurring demand each year is to increase the limit for deductions under Section 80C, currently set at Rs 1.5 lakh. The last revision to this limit occurred in the 2014-2015 Budget, up from Rs 1 lakh.

What does Section 80C offer?

Section 80C of the Income Tax Act provides an avenue for individuals and Hindu Undivided Families (HUFs) to benefit from tax deductions up to 1.5 lakhs. It's important to note that corporate firms, companies, and partnerships are not eligible for tax benefits under Section 80C. This section is further divided into various segments. Individuals can claim tax benefits under Section 80C for their investments and gross earned income within a financial year.

Will the Section 80C limit increase in the upcoming Budget 2024?

Experts suggest that the Interim Budget, set for February 1, 2024, is unlikely to significantly change the income tax rules. Therefore, it's expected that there will be no adjustment to the Section 80C limit. Considering it's an interim budget/vote-on-account, major changes to the individual tax rules are not likely. As per the sources’s points of view -  since the government is encouraging the new personal tax regime, raising the 80C limit might be challenging, as this deduction isn't applicable in the New Personal Tax Regime.

Also Read: Union Budget 2024: Potential Revision of Tax Exemption in the Old Tax Regime, Indicates Report