Seeking
to boost household savings, the government on Thursday hiked the
exemption limit for investments by individuals in financial instruments
to Rs 1.5 lakh. Presently
the investments and expenditures up to a combined limit of Rs 1 lakh
get exemptions under Sections 80C, 80CC and 80CCC of the Income-Tax Act.
The
announcement to hike tax savings limit was made by finance minister
Arun Jaitley in his speech while presenting the Union Budget, 2014-15.There have been
demands from bankers and insurers to hike the tax exemption limit from
Rs 1 lakh per annum to encourage household savings.The
hike in the exemption limit would provide much needed relief to the
salary earners who are reeling under the impact of high inflation.
The financial
instruments which enjoy exemption include life insurance premium, public
provident fund, employees provident fund, National Savings
Certificates, repayment of capital on home loan, equity linked saving
schemes sold by mutual funds and bank FDs of five year maturity.The Direct Taxes Code
(DTC) too had recommended that the combined ceiling for investments and
expenditures be raised to Rs 1.5 lakh per annum.
Source:-The Economic Times
