Section 80C Limit: Has the limit of 80C increased in Budget 2023-24? Forgotten in the news of increasing income tax exemption – budget 2023 has section 80c limit hiked? forgotten in news of increasing income tax exemption
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When was the limit increased last time?
The Section 80C limit was last increased in the financial year 2014-15. It was then increased by Rs 50,000. This was increased from Rs 1 lakh to Rs 1.5 lakh. It helps in tax saving. The amount invested can be claimed under this section under the old income tax regime. Some people are not able to claim deduction under 80C. For such people, the government had started a new system with lower tax rates. It was announced in the financial year 2020-21. From April 1, 2020, people had the option to opt for the old tax regime and claim deductions and exemptions. Otherwise, opt for the new regime with a lower tax rate. However, the benefit of deduction and exemption cannot be taken in the new income tax regime.
Benefits are available on certain investment products
To claim the deduction under section 80C, one needs to invest or spend in certain instruments. They are mentioned in the Income Tax Act. Employees’ Provident Fund (EPF), Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), Sukanya Samriddhi Yojana, National Savings Certificate, etc. are among the products that get the benefit of deduction under 80C. Similarly, this deduction is also available on the expenditure on children’s tuition fees, life insurance policy as well as repayment of home loan principal.
Explained: How much will be the tax saving in the old and new system of income tax? understand the arithmetic according to the salary
Different types of investment products also have different features under 80C. Their returns, liquidity and tax on returns are different. It is important to look at these features before investing.
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