Income Tax Return: The Govt. is planning to increase the Section 80C Deduction Limit!! What We Know

Section 80C of the Income Tax Act, of 1961, is widely utilized for claiming tax deductions. It allows individuals to avail deductions for specific investments and expenses, such as pension schemes, PPF, and life insurance, among others.

No Proposal to Increase Section 80C Exemption Limit: Finance Ministry Clarifies. Amid ongoing discussions on raising the exemption limit under Section 80C of the Income Tax Act 1961, the Finance Ministry has clarified that there is currently no such proposal being considered. 

Despite demands from various groups for higher deduction limits, including the suggestion from the Institute of Chartered Accountants of India (ICAI) to increase the PPF deduction limit, the government has not made any changes to the limits so far.

Union Minister of State for Finance, Pankaj Chaudhary, recently addressed the issue in Lok Sabha. In a written reply on July 31, he stated, "The government's policy is to simplify the Income-tax Act, 1961, by eliminating exemptions and incentives while lowering tax rates. 

Hence, there is no proposal to increase the exemption under Section 80C of the Income Tax Act." His response came amidst discussions about updating small savings plans and Section 80C exemptions in light of the changing economic climate.

Tax Deductions Available under Section 80C

Section 80C of the Income Tax Act, of 1961, is a widely used provision for claiming tax deductions. It allows individuals to claim deductions on certain investments and expenses, such as pension schemes, PPF, and life insurance, among others.

The total claimable amount under Sections 80C, 80CCC, and 80CCD (1) is limited to Rs 1,50,000. However, an additional deduction of Rs 50,000 can be claimed under Section 80CCD for contributions to the NPS.

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.

Also Read: No ITR Refund To Issue Until e-verification of ITR is not done

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