Budget 2024: Why is it opportune for FM Nirmala Sitharaman to hike Section 80C deduction ceiling for income taxpayers?

Also Read: Will Finance Minister Nirmala Sitharaman summation income taxation exemption limit?

The clamour to summation the bounds for Section 80C deductions chiefly arises owed to respective reasons:

1)The existent bounds of ₹1.5 lakh nether Section 80C was acceptable successful 2014 erstwhile Late Arun Jaitley was the concern curate .With ostentation and accrued surviving costs, individuals find it challenging to prevention capable wrong this bounds portion gathering their different fiscal obligations.

Clear CEO Archit Gupta proposes revising the Section 80C limit, which has stagnated since 2014 contempt expanding ostentation rates. A revision would assistance taxpayers successful coping with ostentation and promote savings and investments successful captious fiscal instruments specified arsenic ELSS, taxation saver FDs, and PPF. This aligns with the broader extremity of fostering a financially resilient and prosperous India.

Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited, emphasises the urgency for the authorities to see expanding the Section 80C bounds successful the upcoming budget. This overdue accommodation would supply much-needed alleviation to the mediate class, presently burdened by rising prices and inadequate taxation exemptions. A higher exemption bounds would trim taxation burdens and promote savings and investments important for idiosyncratic and nationalist fiscal growth. Additionally, it would transmission much funds into captious sectors specified arsenic insurance, PF, and ESOPs, thereby deepening fiscal markets and aligning with existent economical conditions.

2) Increasing the bounds tin incentivize semipermanent savings and investments, which are important for fiscal information and stableness successful the future.

A higher bounds tin beforehand investments successful avenues similar the Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), National Savings Certificate (NSC), etc., which lend to superior enactment and economical growth.

Ashish Aggarwal, Director astatine Acube Ventures, said that a higher bounds would incentivize investments crossed divers sectors specified arsenic insurance, beingness insurance, and infrastructure bonds. It would besides code income inequality successful an inflationary situation by adjusting thresholds to forestall salaries from rising disproportionately compared to inflation.

He added that, ultimately, specified a argumentation accommodation would show the government's responsiveness to existent economical dynamics and citizens' needs, positioning it arsenic a proactive instauration susceptible of adapting fiscal strategies to payment the system and its people.

Income Tax Deductions nether Section 80C

Section 80C offers deductions for assorted investments and expenses:

Public Provident Fund (PPF)

Tuition Fees

Five-year Fixed Deposit

Premium connected Life Insurance Policy:

Equity Linked Savings Schemes (ELSS) Mutual Funds:

Repayment of Principal connected Housing Loan:

These deductions assistance taxpayers trim their taxable income, lowering their wide taxation liability.

According to PTI, FM Sitharaman volition apt contiguous the Union Budget for 2024-25 successful the 3rd week of July. This volition beryllium her seventh consecutive budget.

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts, and not of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions.

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Published: 26 Jun 2024, 01:20 PM IST