Budget 2023 should divide Section 80C into 6 major segments with separate limits: Manoj Sharma

Section 80C of the Income Tax Act should be divided into six major segments with separate investment/deduction limits for each segment, says Manoj Sharma, Co-Founder and Director of Policybazaar.

Sharing his Budget 2023 wishlist, Sharma said that Section 80C should be divided into the following major segments:

Education: Tax deduction for the amount spent on the education of children

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Parents’ Health: Tax deduction for the amount spent on parents’ health and insurance

Insurance: Tax deduction for the amount spent on health insurance and term insurance

Medical expenses: Tax deduction on the amount spent on medical treatment of major diseases for self and dependent family members and preventive health checkup.

Also Read: Budget 2023 Section 80C limit increase expectations: What experts are saying

Home loans: Tax deduction for EMI/ interest payments for loans taken for the purchase of property for self-use.

Donations: Tax deduction for grants given to NGOs working for social causes

Sharma further said that there is also a need to increase the Section 80C limit, a demand which is pending for several years.

“It would be interesting to see an increase in limits for 80C since no revision has been made for many years now. Also, it will be beneficial if the 80C limit can be linked to income slabs,” he said.

Tax Relief for Salaried Class

The salaried class is generally tax compliant and pays their taxes with honesty. Sharma said that they should be rewarded and get special benefits for the tax amount paid by them.

“The Government can allow some deduction applicable only for salaried class, or they can be offered some incentive based on the tax paid by them. Also, allowance of chapter VIA deduction in new tax regime and extension of time limit for claiming deduction under chapter VI-A (till date of filing ITR) could be considered for salaried class,” he said.

Also Read: Section 80C to HRA rules change expected from Budget 2023

“In addition, extra tax incentives for taxpayers who invest in higher education will be a great move. Apart from that, any home loan (personal loan or loan against property) taken by taxpayers for purchasing or constructing a house should get tax benefits,” he added.