Union Budget 2021: Along with other announcements in the general budget presented every year, the most eye is on what relief the government is going to give in the matter of income tax. There are many expectations from this budget. In Budget 2020, the government gave a big relief by introducing an alternative income tax slab and proposed to extend one-year additional deduction of up to Rs 1.5 lakh on home loans. But salaried taxpayers also need some other reliefs from the government. In order to enable taxpayers to get the full benefit of tax deduction under the Income Tax Act, these 4 recommendations need to be considered in the Budget 2021…
New section for home loan deductions up to Rs 5 lakhs
Tax deductions need to be streamlined in order to benefit all the taxpayers who buy the house. Right now, home loan borrowers get the benefit of deductions under section 80C, 24b, 80EE and 80EEA of the Income Tax Act. All these should be combined to form a single tax section, which is only for the payment of the home loan and this payment includes both the interest and the principal of the loan.
It is also necessary to organize these sections because under section 80EE and 80EEA, second time home buyers do not get the loan. Due to the income limit, it is not possible for everyone to buy a house of perfect size in the first place. A well-organized tax code should be helpful to all taxpayers buying a home.
The tax deduction under Section 80C is reduced to Rs 1.5 lakh and makes it possible for families to get full value of their loan payments, insurance premium and necessary expenses. In cities, all these expenses together easily cross the limit of Rs 1.5 lakh. Separate section for home loan payments will be helpful for taxpayers to get a higher deduction on expenses.
Section 80C limit should be increased to 3 lakh
With the new tax deductions for life insurance and home loan payments, the increase in the limit of section 80C of the Income Tax Act will encourage more and more people to take not only home loans and term insurance, but also more in government schemes like EPF, PPF Will also motivate you to invest.
Separate deductions for term insurance premiums of Rs 25000
It is necessary to provide full benefits to the taxpayers under their tax deduction for their various urgent expenses such as insurance premiums. The deduction limit of up to Rs 1.5 lakh is insufficient under section 80C, especially for those whose expenses are complex, family members depend on them and have financial liabilities. Therefore, it would be a good initiative to remove life insurance premiums from section 80C to a new section.
Increase the limit of section 80TTA to Rs 30000
Presently, in the case of savings account of bank / co-operative society/post office under section 80TTA of Income Tax Act, tax deduction on interest income up to Rs 10,000 per annum for a person below 60 years of age or HUF (Hindu Undivided Family). Benefit. This limit should be increased to 30000 rupees. This step will encourage people to keep cash in their savings account instead of keeping cash at home.