Reported By:| Edited By: DNA Web Team |Source: DNA webdesk |Updated: Jan 19, 2022, 11:38 PM IST
Finance Minister Nirmala Sitharaman is set to announce her fourth Union Budget on February 1, 2022. The budget 2022 carries several expectations from all corners, be it industries like agriculture, health and real estate or individuals like entrepreneurs and salaries professionals.
The is hope that the tax exemption limit for salaried professionals might be increased in the upcoming budget after being the same for a number of years. With upcoming polls in five states, this announcement could also impact the substantial voting influence that salaried professionals have in India. So, here’s a look at what else might be in store for salaried professionals in Budget 2022.
Tax exemption limit
Currently at Rs 2.5 lakh, the limit has not been revised for the last eight years. The limit had been increased by Rs 50,000 from Rs 2 lakh at the time. Now, taxpayers are seeking this limit to be increased to Rs 5 lakh. However, more realistic expectations could see the limit being increase to Rs 3 lakh.
Scope of exemption under 80C
An exemption of Rs 1.5 lakh is allowed under Section 80C currently. It was increased from Rs 1 lakh to the current limit in 2014. The section is crucial for tax saving strategy of salaried professionals. Budget analysts expect this limit to increase to Rs 2 lakh in the upcoming budget.
Tax-free Fixed Deposit with 3-year lock-in period
The Indian Bank Association has demanded that the lock-in period of tax-free FDs be lessened from 5 years to 3 years. Banks have also decreased the interest rates. The interest rates on PPF are currently better than FDs, leading to lesser investments in the option and instead more in mutual funds and stocks. Making FDs attractive in the short-term could be on the cards.