Public Provident Fund (PPF) will be the most preferred solution to invest more for claiming tax advantage if the deduction limit beneath Section 80C is elevated in the upcoming Budget to Rs 3 lakh, according to a current Twitter Poll carried out by FE Online.
As lots of as 48 per cent participant in the poll mentioned they would claim tax exemption by investing more in PPF if Finance Minister Nirmala Sitharaman elevated the Section 80C limit to Rs 3 lakh.
Home Loan, LIC premium payment and NSC/Post Office schemes are some other solutions exactly where individuals would like to invest/commit to claim the deduction. Of the total participants in the FE Online poll getting carried out in the run-up to Union Budget 2021, 28.1 per cent participant mentioned they would claim the deduction by spending more for household loan repayment, though 14.6 per cent mentioned they would spend more for Life Insurance Policy premium. 9.4 per cent participants would like to invest more in post workplace schemes if Finance Minister Nirmala Sitharaman increases the Section 80 C limit.
Apart from the above 4 solutions, investing in ELSS is also an solution for claiming the tax exemption beneath Section 80 C.
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Under the Income Tax Act 1961, Section 80C is the most well-liked solution to claim the tax deduction. Currently, assessees can claim deduction up to Rs 1.5 lakh beneath Section 80C by contributing to life insurance coverage premium, ELSS, Employees Provident Fund, annuity strategy premium payment, post workplace modest savings schemes, PPF, tax saver FD, Sukanya Samriddhi scheme, Ulip, contribution to LIC annuity strategy, investment in NPS, NABARD bond and by repairing the principal quantity of the household loan. This deduction up to Rs 1.5 lakh can also be claimed for payment of tuition charges of kids.
ALSO Study | Income Tax exemption up to Rs 3 lakh beneath Section 80C amongst top rated Budget 2021 Personal Finance expectations
It is anticipated that Finance Minister Nirmala Sitharaman will raise the existing limit beneath Section 80 C to Rs 3 lakh. Some professionals are hoping that this limit may well be raised to Rs 2.5 lakh.