Latest Budget amendments:

1. Income tax will be virtually nil for slab between 2.5 to 5 Lakhs tax slab by way rebate not straight.

2. Capital gain against property can be invested into 2 units instead of 1 currently.

3. Deemed rent in self-occupied will be go up from 1 to 2 units hence if you invest in two homes deemed rent will not be applicable .

4. Standard deduction from 40000 to 50000 for salary class.

5. Section 194 a (TDS deduction limit will go up on bank interest currently Rs. 10,000 will go up to Rs. 40,000/-) and 194 I (TDS deduction on housing rent will go up from Rs.10,000 to 40,000).

6. Threshold limit for TDS on rent increased from Rs. 1,80,000/- to Rs. 2,40,000/-

7. Threshold limit for TDS on interest income increased from Rs. 10000 to Rs. 40,000/-.

8. Persons working in unorganised sector and having income upto Rs. 15000 per month will get pension of Rs. 3,000 per month under Pradhan Mantri Shram Yogi Maandhan Yojana.

Few sections which give us tax benefits: (All about Section 80C)

Sec 80C has tax exemption limit of Rs. 150000/- wherein the amount can be invested in Insurance, Equity linked mutual funds, Public Provident fund and tuition fees.

Deduction on Principal Payment on Home Loan

Deduction up to Rs 1.5 Lakh is allowed on the principal repayment of the housing loan if the house is self- occupied or vacant.

The loan should be taken from Bank and NBFCs. Loans taken from friends and family not allowed as deduction. Deduction can also be claimed by people who have multiple properties.

Total deductions that can be available in Sec 80C wherein tax can be saved is summed up as below:

  • PPF,
  • Sukanya Samriddhi Account,
  • NSC,
  • Tax saving fixed deposit for 5 Years,
  • Life insurance,
  • Different Pension Plans,
  • Equity linked Mutual Funds,
  • Principal payment on home loan,
  • Stamp duty registration cost of the house,
  • Tuition fee for 2 children.

Many other amendments and details coming up in the next article.

The content is posted only for sharing knowledge. Author is not responsible for any damage caused. For any queries, author can be reached at [email protected] or +91 9819244185.

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Qualification: CA in Practice
Company: Makwana Sweta & Associates
Location: Mumbai, Maharashtra, IN
Member Since: 20 Aug 2017 | Total Posts: 62
A qualified Chartered Accountant with over 4 years of rich experience in Company Law, Audits, Accounts & taxation. She is a writer at her own blog She is keen in streamlining business accounts of the Company and provide Startup consultancy. View Full Profile

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February 2021