PPF income tax rebate, top 5 expected budget 2022 announcements

Budget 2022 expectations: After the economic survey painted India in a bullish light with good macro-stability indicators, money-earning individuals and taxpayers are expecting some relief from Nirmala Sitharaman when it will present its fourth general budget today. From the increase in the annual limit of Section 80C of the Income Tax Act to the PPF filing limit, taxpayers also expect some relief from the income tax bracket.

Asked about the top 5 relief taxpayers expect from Nirmala Sitharaman today, Pankaj Mathpal, MD and CEO of Optima Money Managers, listed the following:

1]Section 80C Annual Limit Increase: Taxpayers across the country are awaiting Nirmala Sitharaman’s response to the Institute of Chartered Accountants of India (ICAI) suggestion to increase the Section 80C annual limit from the current one 1.50 lakh to 3.0,000,000. It was last raised from 1,000,000 to 1.50 lakh in 2014 and the ICAI and taxpayers believe that the Narendra Modi government should tighten this Section 80C limit.

2]Increase in the ceiling of the public provident fund or the PPF: Like the Section 80C limit, ICAI has suggested to the Narendra Modi government to double the annual PPF deposit limit from the current one. 1.50 lakh to 3.0,000,000. Taxpayers expect an announcement from Nirmala Sitharaman in this regard in today’s upcoming budget.

3]Change of income tax slab: Two years ago in Union Budget 2020, Nirmala Sitharaman had introduced a dual tax scheme where she introduced a new tax scheme giving a lump sum deduction to taxpayers of 2.50 lakh to Annual income of 5.0 lakh which led to no income tax till Annual income of 5.0 lakh. However, to benefit from this new tax regime, the taxpayer had to lose all the tax benefits such as Section 80C, Section 80CCD, home loan interest repayment, home loan principal repayment, student tuition fees, etc. children, etc This year, taxpayers expect the Narendra Modi government to roll out a single tax regime which will include income tax brackets from the existing new tax regime as well as demands for tax benefits from the old regime.

4]Support for equity investments: Taxpayers are also expecting Union Finance Minister Nirmala Sitharaman to announce relief from equity-linked investments like ELSS mutual fund, Ulips, etc. ) or National Pension Scheme (NPS); almost exhausted their Annual exemption limit of 1.5 lakh. So, the announcement of a separate section to claim tax benefit on equity-linked investments is also expected from Nirmala Sitharaman today.

5]Increase in the demand for tax benefit on the repayment of interest on the mortgage: Homebuyers who pay an EMI home loan expect the increase in income tax exemption on repayment of interest on the home loan under Section 24 to be increased by ‘existing 2 lakh to at least 3 lakh as they house property prices are so high that a buyer has to pay at least 3,000,000 3.5 lakh home loan interest per annum on their home loan principal.

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