Highlights
- Demand to increase the limit of section 80C to Rs 2.5 lakh per year
- This demand is made every time from the budget
- You can claim tax deduction under 80C on investments up to a maximum of Rs 1.5 lakh
Since then, that is, for the last seven years, this limit has remained the same. Expenses have gone up for many people, salary has increased but accordingly the benefit under section 80C has not increased. Due to this, the limitation of this section is easily eliminated for many income tax payers.
What is the benefit of section 80C?
You can claim tax deduction under section 80C of the Income Tax Act on investments up to a maximum of Rs 1.5 lakh. The benefit of this section is for individual taxpayers and Hindu Undivided Families (HUFs). Some of the options one can invest in to get the benefit of tax deduction under section 80C are as follows…
- life insurance premium
- ELSS
- EPF, VPF Contribution
- Contribution in annuity plan of LIC
- Invest in NPS
- Invest in Post Office Small Savings Schemes
- PPF
- Tax Saver FD
- Sukanya Samriddhi Scheme
- Ulip
- nabard bond
- Repayment of principal amount of home loan
- children’s tuition fees
Under section 80C, a taxpayer is free to invest in one or more savings instruments subject to a maximum deduction of Rs 1.5 lakh. The threshold limit for deduction to be claimed is determined after considering all eligible investments made before the end of the financial year.
Why should the section 80C limit be increased?
Experts believe that the government should increase the limit of section 80C keeping in mind the epidemic and rising inflation. This demand is made every time from the budget. There has been a demand for a long time to increase the limit of this section to Rs 2.5 lakh per annum. Any increase or decrease in the deduction limit of section 80C has a direct bearing on the taxable income and consequently on the tax liability of an individual.
Insurance on EPF: This thing worth lakhs is available for free with PF, do you know?