The present income tax exemption limit available under Section 80C should be raised from Rs 1.50 lakh to Rs 3 lakh, keeping in mind the disposable income, deflating value and purchasing power.” At the same time, taking into account the increase in cost of living, it is imperative that the basic exemption limit should be increased from the current Rs 2.5 lakh to at least Rs 5 lakh, adds Parakh. The limit of taxable interest earned from savings accounts which is at present Rs 10,000 under Section 80TTA should also be hiked. Currently, some of the financial instruments which enjoy exemption include public provident fund, employees provident fund, life insurance premium, National Savings Certificates, fixed deposits by banks with five-year maturity and equity linked saving schemes by mutual funds.
An increase in the exemption limits on medical treatment is much needed today, along with the introduction of world-class medical facilities with no extra cost. That apart, the present exemption limit of Rs 15,000 per annum provided by an employer as medical reimbursement should be revised to Rs 50,000, considering the cost of medical treatment in today’s times, notes Parakh. For senior citizens too, there should be an increase in the exemption limit on medical treatment, as medical expenses have risen sharply.
Home Loan benefits
Real estate prices have skyrocketed, in the last few years, at a rapid pace. More and more people are buying property in India. Demand for home loans and interest rates on the same has also gone up. In such times, experts believe that the claim of up to Rs 2 lakh as tax deduction on the home loan interest payment should be increased to match the rising inflation. At the same time, there is also a dire need to introduce tax concessions on home insurance premiums so as to encourage end users to insure their homes. This will help to further boost the real estate sector in the country.
Infrastructure bonds and tuition fees
Parakh says that the deduction which was available, earlier, for investment under infrastructure bonds up to Rs 20,000, has not been made available in the last few years and should be reintroduced with the enhanced limit. This will provide an extra deduction to the salaried class and also will help the Government to raise funds for infrastructure projects.
the Union Budget should increase the available deduction under the IT Act or come up with a separate deduction for the same, as a separate provision than what it is at present being a part of section 80C, he adds.
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