Budget 2024: Why is it opportune for FM Nirmala Sitharaman to hike Section 80C deduction ceiling for income taxpayers?

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Section 80C provides income tax benefits of up to ₹1.5 lakh to salaried individuals for investing in income tax saving instruments like the Public Provident Fund (PPF), five-year fixed deposit (FD), ELSS, National Savings Certificate, etc. Personal Finance experts believe Finance Minister Nirmala Sitharaman should hike the 80C deduction ceiling while presenting the first Union Budget of Modi 3.0 govt.The clamour to increase the limit for Section 80C deductions primarily arises due to several reasons:1)The current limit of ₹1.5 lakh under Section 80C was set in 2014 when Late Arun Jaitley was the finance minister .With inflation and increased living costs, individuals find it challenging to save enough within this limit while meeting their other financial obligations.Clear CEO Archit Gupta proposes revising the Section 80C limit, which has stagnated since 2014 despite increasing inflation rates.

A revision would aid taxpayers in coping with inflation and encourage savings and investments in vital financial instruments such as ELSS, tax saver FDs, and PPF. This aligns with the broader goal of fostering a financially resilient and prosperous India.Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited, emphasises the urgency for the government to consider increasing the Section 80C limit in the upcoming budget.

This overdue adjustment would provide much-needed relief to the middle class, currently burdened by rising prices and inadequate tax exemptions. A higher exemption limit would reduce tax burdens and encourage savings and investments crucial for personal and national financial growth.