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Sunday, January 23, 2022

Budget 2021 for Income Tax: Will taxpayers get tax relief? 80C limit is expected to increase

Union Budget 2021 for Income Tax:Finance Minister Nirmala Sitharaman is going to present the budget 2021 in the Lok Sabha on Monday. The entire country facing COVID 19 has high hopes from this budget. The eyes of taxpayers are also on the budget box. In the last budget, taxpayers got the gift of one year increase in optional income tax slabs and additional deduction of up to Rs 1.5 lakh on loan interest for the purchase of house. Now it remains to be seen what the announcements are for the taxpayers including salaried class from this budget.

Experts believe that this time the income tax slab is not expected to change significantly in the budget. But in the budget, you can definitely get relief under section 80C and section 80D. The limit of section 80C in the budget can be increased to Rs 2.5-3 lakh. At present, tax deduction up to a maximum of Rs 1.5 lakh can be claimed under this section.

There is also an appeal to increase standard deduction

Due to changes in work from home and lifestyle, the expenses of salaried individuals have increased. For this reason, some sections have been requested to increase the standard deduction limit. Right now the limit for standard deduction is 50000 rupees. Apart from this, there is an appeal to increase the maximum exemption limit on health insurance premium under section 80D. Currently this limit is 25 thousand rupees.

Budget 2020 Announcements

In Budget 2020, alternative income tax slabs were announced. Now both the old traditional income tax slab and the new alternative tax slab are available to taxpayers. The optional tax slab is as follows-

Remember that the income taxpayers adopting alternative tax slabs will not be able to take advantage of certain deductions and exemptions.

It was proposed to extend the additional deduction of up to 1.5 lakh rupees a year for the purchase of cheap houses. In the budget 2019, the government had made a provision for an additional deduction of up to Rs 1.5 lakh on the interest payment of home loans. For this, a new section 80EEA was added to the Income Tax Act. However, only those people who took loan between April 2019 and March 2020 could take advantage of it. In the budget 2020, this deadline was extended for one year. A tax deduction of up to 2 lakh rupees is available under Section 24 on the interest payment of a home loan. At the same time, a deduction up to Rs 1.5 lakh is available under section 80C on the principal amount.

  • DDT was abolished on dividends paid by companies and mutual funds.
  • It was proposed to amend section 206C of the Income Tax Act to collect TCS on the sale of Overseas Remittance and Overseas Tour Packages. According to the new rules under section 206C, TCS will be payable at the rate of 5 per cent if a person sends an amount of Rs 7 lakh or more as remittance under LRS outside India in a financial year. If the PAN or Aadhaar is not provided to the Authorized Dealer or Tour Package vendor, the TCS rate will be 10%. However, a refund can be found by filing an income tax return.
  • Tax concession to promote startups
  • Declaration of Confidence Scheme to reduce litigation of direct tax.
Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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