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In Mumbai on Wednesday RBI Governor Raghuram Rajan said that there is a need for increase in tax exemption limit under section 80C  on financial investments by individuals. Currently Section 80C  allows investments up to Rs.1.50 lakh.
Section 80C was introduced in place of section 88 w.e.f. 1-4-2006. Limit of One Lakh of Investment under section 80C was fixed in A.Y. 2006-07 and   after keeping the limit same for 9 year i.e. up to A.Y. 2014-15 the Government increased the same by Rs. 50000/- to Rs. 1.50 Lakh from A.Y. 2015-16.
While Acknowledging the Rs 50,000 increase in the limit in the last budget to Rs 1.5 lakh a year, he said benefits of this instrument have been lost over time as the limit was anchored at Rs 1 lakh for a long time. Mr. Rajan Said that increase in limit will help in increase in National saving rate which has decreased to 30% from a high of over 36.9%  in 2007-08.

Finance Minister Arun Jaitley, who increased the limit to Rs.1.50 lakh in his last budget, will be presenting the first full fiscal budget on February 28, 2015.
We hope Mr. Jaitley will increase the limit Under section 80C and also increase basic exemption Limit to provide relief to General Taxpayers.

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0 Comments

  1. Vee Gee says:

    In a country where wast number of people are living below poverty line and where millions of kids go to sleep with half empty stomach, no income tax exemption should be given to anybody. Let us remove poverty first then we can think of increased national savings.

  2. Acharya says:

    Dear sir

    The salaried class in this country is taxed heavily by the Taxman since it is easy for Govt to collect the tax from them. We have seen economic growth in this country has resulted in an increase in business income of individuals doing business. This segment of our society are not monitored properly by the Taxman while collecting the Tax. The Govt should think and find a way to collect the correct amount if tax by integrating State and central Revenue database and implementing a scrutiny mechanism of the accounts of the businessman in this category.
    This will make the tax distribution equitable to all people.

    Thank you

  3. pravin sheth says:

    (A) IT 80 C LIMIT
    FOR FIXED DEPOSITE, ESPECIALLY FOR SENIOR CITIZENS,
    BLOCK PERIOD SHOULD BE 3 YEARS AND NOT FOR 5 YEARS.

    (B) FURTHER EXEMPTION FOR TECHNOCRATES AGE 70 + WHO CONTRIBUTES TOWARDS
    ENVIRONMENT PROTECTION
    IN VIEW OF ENVIRONMENT PROTECTION, RETIRED TECHNOCRATE AGE 70 +, WHO CONTRIBUTE THEIR VALUABLE TECHNICAL IN PUTS TO ENVIRONMENT PUBLIC HEARINGS, THEY SHOULD BE ENCOURAGED BY GIVING A SUITABLE FURTHER TAX EXEMPTION FROM NET TAXABLE INCOME,SAY BY SOME % LIMIT OR BY A LUMP SOME AMOUNT OF RS 50,000/- PER AY, SO THEY CAN HAVE SOME FUND AVAILABLE FOR FURTHER CONTRIBUTION TOWARDS ENVIRONMENT PROTECTION FOR A CLEAN INDIA- CLEAN ENVIRONMENT CONCEPT.
    THANKS,
    PRAVIN SHETH
    M.Sc.Tech. UDCT MUMBAI, 1971 batch
    mob +919377958840
    mail id [email protected]

  4. NIRAV MEHTA says:

    GOVT. SHOULD ISSUE GOLD BOND WITH 6 % INTEREST RATE P.A. AND INCLUDE IT IN SEC. 80 C. AND INCREASE LIMIT OF SEC. 80 C TO RS. 500000.00.
    SO, THOSE WHO ARE INVESTING BLACK MONEY IN GOLD WILL TRANSFER THEIR MONEY TO THIS BOND. ULTIMATELY BOTH GOVT. AND PUBLIC WILL GET BENEFIT.

  5. PREM SAGAR KUNDE says:

    SIR, IT IS MOST APT THAT THE REMARKS OF MR.RAJAN IS TO BE UNIVERSALLY AGREED AS THE SAVING CAOACITY OF THE TAX PAYERS HAS INCREASED MULTIFOLD AND THIS MEAGRE AMOUNT OF RS.1.50 LAKHS IS NOT AT ALL ACCOUNTABLE CONSIDERING THE INFLATION ASPECT. I FULLY AGREE WITH THE THOUGHTS EXPRESSED BY MR.RAJAN AND REQUEST THE TAX PAYERS COMMUTY TO PLEASE PUT IN A REPRESENTATION TO THE HON’BLE FINANCE MINISTER TO CONSIDER THIS POINT FAVOURABLY, AS THIS WILL GO A LONG WAY IN HELPING THE SALARY EMPLOYEES.
    THANKS
    PREM SAGAR KUNDE

  6. ravi says:

    Finance Minister Mr Jaitley, who increased the limit to Rs.1.50 lakh in his last budget, has done good for individuals & for Nation development as well. Exemption limit of Tax should also be shifted 2.5 lac to at least 5.00 lac so that single salary earner can survive with some comfort, after all everybody is having right to live with some dignity.

  7. S C Kapur says:

    Very good observation. Current FM Mr. Jaitely should consider the suggestion very seriously which has been ignored by earlier Governments for last 9 years as rightly identified by RBI Governor – Mr. Rajan.

    Congratulations Mr. Rajan.

  8. Girish Kumar Ramaiah says:

    I fully support Dr. Rajan’s suggestion to increase the limit of Rs 1.50 lakh. The Governmnt should also abolish completely tax earned on Fixed Deposit / Saving Bank Account etc. Encourage people to save. It would be better to abolish Income Tax completely. Instead, expenditure tax on non essential and luxury items can be levied.

  9. Varaprasad Daitha says:

    It is good to hear the news from the head of RBI and I hope the FM will note this in his budget proposals. It is also to consider allowing citizen of India who are instrumental to creation of unaccounted money to deposit in specified accounts with no interest for 5 years. This will make the sinners to clear off their hands and the Government not suffering loss of taxes. These funds might be utilised for infrastructure development / Solar Energy projects etc. The needy states might be allowed OD from these accounts only.

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