Part 80C is a well-liked one beneath the Revenue Tax Act, generally utilized by salaried earnings taxpayers to assert tax deductions for investments and bills.A few of the frequent investments that may be claimed as deductions beneath Part 80C are:
- PPF
- PF
- ULIP
- ELSS
- Life Insurance coverage Premiums
- Sukanya Samriddhi Yojana
- NSC
Why Part 80C restrict needs to be hiked
Surabhi Marwah, Tax Associate, EY India factors out that the restrict of Rs 1,50,000 for deductions beneath Part 80C has remained the identical for the final 9 years (it was final revised in tax 12 months 2014-15).
“Contemplating the inflation over time and the truth that most of this restrict is utilised by contribution to provident fund and principal reimbursement of housing mortgage, this restrict needs to be hiked to a minimum of Rs 250,000,” Surabhi tells TOI.
Chander Talreja, Associate at Vialto Companions too says that with a number of choices obtainable for deduction beneath Part 80C, the current capping could get exhausted amongst the most typical of them like worker’s PF contribution, LIC premium, PPF deposit and so on. In line with Chander Talreja, the federal government could think about rising the stated restrict by one other Rs 50,000/-. “Few choices which can advantage addition to the present checklist choices of bills are price paid for upscaling certification programs, government programmes, AI expertise curriculums and so on,” he tells TOI.
Parizad Sirwalla, Nationwide Chief, World Mobility Companies – Tax, KPMG in India advocates for unbiased limits for important investments and bills. Investments/ bills eligible for complete deduction of Rs 1.5 lakh beneath Part 80C is a bundled basket, Parizad factors out.
“Therefore, there has traditionally been an expectation to carve out sure important investments / bills out of Part 80C and supply a separate restrict for a similar fairly than add extra choices within the basket,” she tells TOI. “Compensation of housing mortgage deduction is one such the place a separate carve out could be thought of and a separate deduction could also be evaluated to the tune of approx. Rs 1 lakhs,” she elaborates, including that from an general deduction quantum perspective, yearly the want checklist is for the restrict to be doubled to Rs 3 lakh.
Will Funds 2024 hike Part 80C restrict?
Specialists are of the view that the Interim Funds is unlikely to tinker a lot on the earnings tax entrance, and therefore any change in Part 80C restrict shouldn’t be anticipated on February 1, 2024.
Parizad Sirwalla tells TOI, “This being an interim price range/ vote-on-account it’s prudent to not anticipate main adjustments to the person tax regime.”
Chander Talreja is of the view that given the federal government’s focus is to encourage new private tax regime (as per the pattern in the previous few budgets) it might be a bit difficult to hike the 80C restrict, as presently, the stated deduction shouldn’t be allowed in New Private Tax Regime.
