Budget 2014 – CII suggests raising 80C deductions to Rs. 2.5 Lakhs
In its Pre-Budget wish list regarding Income Tax 80C, the
Confederation of Indian Industries (CII) has suggested to the Finance
Ministry that the consolidated deduction under 80C be raised from Rs. 1
lakh to Rs. 2.5 lakhs.
Most Central Government employees have savings schemes that are
linked with General Provident Fund. Under this scheme, the employee not
only gets interest for the money saved, but also enjoys the option to
withdraw the money whenever required. The money is also entitled to
exemption under Section 80C. It has to be mentioned here that new
employees (appointed on or after 2004) do not have this option.
If the Income tax deduction is raised from Rs. 1 lakh to Rs. 2.5 lakh
under Section 80C, then there are possibilities that savings will
increase among the employees.
It has to be mentioned that CII has suggested that a separate section
be created for Tuition fees (Children Education Allowance). Although
the allowance given for the higher education of the children is exempted
from income tax under Section 80C, the Rs. 1 lakh exemption is
considered to be very low. Now a amount of one lakh is exempt form
income tax for all long and short term saving schemes including General
Provident Funds.
CII has also suggested that the Rs. 1.5 lakh exemption being granted
for house loan interests should be raised to Rs. 5 lakhs under Income
Tax Section 24 for self-occupied property.
