The Modi government may offer significant relief to taxpayers in the first budget of its third term.
Reports suggest that Finance Minister Nirmala Sitharaman could raise the Section 80C limit of the Income Tax Act from Rs 1.5 lakh to Rs 3 lakh in the upcoming Budget 2025.
However, these are only expectations that millions of taxpayers are hoping for. If implemented, this move could be a major benefit for taxpayers.
Currently, those opting for the old tax regime can avail of tax savings under this limit, while it is not available under the new tax regime.
When was the last time the 80C limit was increased?
The Section 80C limit was last raised in 2014 when Finance Minister Arun Jaitley increased it from Rs 1 lakh to Rs 1.5 lakh.
This change was a key feature of the government’s first budget. However, the limit has stayed the same for the past decade.
Taxpayers have long been hoping for an increase in the 80C limit to match their rising costs and income.
What is the benefit of Section 80C?
Under Section 80C, taxpayers can claim a tax deduction of up to Rs 1.5 lakh.
This includes savings on investments and expenses such as PPF, ELSS, life insurance, NSC, and children’s tuition fees.
The deduction is available only to individuals and Hindu Undivided Families (HUF).
Why should the 80C limit be increased?
Increasing the limit of Section 80C reduces taxpayers’ taxable income, providing direct benefits.
Despite rising costs and higher salaries over the years, the 80C limit has remained unchanged, leading many taxpayers to seek ways to fully utilise the available limit to save on taxes.
What are the expectations from Budget 2025?
The Finance Minister will present the Union Budget on 1 February 2025. Taxpayers are hopeful that the 80C limit will be raised to Rs 3 lakh, offering greater exemptions on their investments and savings.
If this happens, it will provide significant relief for taxpayers from the government.
