New Delhi: Union Finance Minister Nirmala Sitharaman will present the Budget 2021-22 (Budget 2021) in Parliament tomorrow, ie on 1 February 2021 at 11 am. Due to the Corona crisis, it is believed that this year’s budget can be very different. In this, along with the health sector, announcements can be made to increase spending on many other sectors. In such a situation, every sector is expecting relief announcements from the Central Government. In this series, the insurance sector also wants the government to make insurance compulsory for every citizen of the country. Also, increase the tax deduction limit under Section 80C of the Income Tax Act (IT Act).
Buying an insurance policy in the country is considered to be an expense rather than a financial aid in bad times. People associated with the insurance sector say that in such a situation, the government should take steps to make people aware of insurance schemes. Also, to attract people towards non-life insurance, the tax benefits limit should be increased. Also, the government should consider starting new insurance schemes, so that people can get more benefit. Explain that all life and health insurance policies get tax exemption under Section 80C.
Section-80C includes many products including ELSS, PPF
Under Section 80C of the Income Tax Act, there is a benefit of tax rebate on investments up to Rs 1.50 lakh. Let us know that Section-80C includes many other products like ELSS, PPF, NSC. In such a situation, people prefer to invest in such options instead of insurance scheme for tax savings under Section 80C, in which they can get tax returns as well as good returns in the long term. Therefore, the government may consider increasing the tax exemption limit under Section 80C, so that the existing limit of Rs 1.50 lakh can be increased.
Scope of Section-80D and 80CCD expected to be extended
The central government can also increase the limit of Section-80D. Right now the limit under this section is Rs 50,000. It was only for senior citizens. In this budget, it can be extended to every person. It is being said that pension plans are also included in the Section-80 CCD. Explain that the investment made in the NPS scheme (NPS) gets an additional exemption of Rs 50,000 under Section-80 CCD (1B). For this reason, people invest in NPS instead of life insurance. It is expected that pension plans will also be exempted under Section 80CCD (1B).
