Income Tax rate slabs expectations in Budget 2019: Rs 2 lakh exemption under section 80C?

It’s Budget 2019 time! Many of us are constantly busy with understanding what next big reforms Prime Minister Narendra Modi’s government will bring this time. Guess what! Expectations have taken place on some benefits in your savings as well either be a Life Insurance or a Fixed Deposits. One good news that citizens are eagerly eyeing would be tax exemption which will not only help them save big on taxes but also earn extra on their savings. 

Archit Gupta, Founder & CEO ClearTax said, “It is expected that the new Budget will revisit the limit and increase the limit up to at least Rs 2 Lacs, which can be a huge respite for salaried people. “

Currently, a person is allowed to only get tax claim of Rs 1.5 lakh under section 80C of Income Tax Act. 

If the government does extend the exemption limit in section 80C in Budget 2019, then a taxpayer will earn extra on a host of savings. Here’s a list of claims that can be made under this section. 

1. Life insurance premium for self, spouse or children.

2. Contribution towards Public Provident Fund (PPF).

3. Contribution towards a superannuation fund. 

4. Contributions made under provident funds which are operated by central government. 

5. Deferred annuities paid by self and the government. 

6. Contribution made towards a recognized provident fund. 

7. Subscriptions made under unit linked insurance plans (ULIPs).

8. Investment in government deposits or securities. 

9. Investment in National Housing Bank's pension fund. 

10. Subscriptions for saving certificates. 

11. Investment made towards ULIPs of LIC mutual fund. 

12. Tuition fees of maximum two children who studying in India. 

13. Investment made in a notified units of mutual fund.

14. Annuity plans of insurance companies including LIC. 

15. Bonds notified by NABARD. 

16. Repayment of housing loan taken for a residential property.

17. Investment in deposit scheme of public sector companies allocating long-term financing for housing.

18. Investment in pension funds managed by notified units of mutual funds. 

19. Investment in mutual funds which are recommended by CBDT (Central Board of Direct Taxes).

20. Contributions made towards senior citizen saving schemes.

21. 5 year Fixed deposits tax saving.

22. Having fixed deposits with a scheduled commercial bank (SCB) with a minimum tenure period of 5 years. 

Thereby, if you have the above-mentioned contributions, investment, premiums, annuity, loans or tuition fees - then you are set to see some major ache din in Budget 2019 in the form of exemption made under section 80C. 

Under section 80C, a taxpayer is allowed for a certain deduction on income from other sources, which helps him or her to lower tax liability against his or her taxable income.