Will the 80C limit increase to Rs 3 lakh in the budget?
Budget 2026: The common man paying taxes in India always expects relief from the budget. In the last few years, the government has made major changes in the tax system. Now a new tax regime has been implemented, in which there is the advantage of lower tax rates, but the old exemptions are missing. Statistics show that about 72% of taxpayers have chosen the new system for the financial year 2024-25, because there is less paperwork in it and the net tax burden has also become lighter.
But, the other side of the coin is that even today a large section of people stand with the old tax regime. The reason for this is their old savings, home loan and investments made for the future. The problem is that the limit of deductions on which these taxpayers are relying has not increased for years, while inflation has reached the seventh sky. From the upcoming budget 2026, it is expected that the government will remove the dust accumulated on these limitations.
‘Lakshman Rekha’ of 80C has not changed since 10 years
The most discussed section is Section 80C. This is the section under which tax exemption is available on PPF, ELSS, children’s tuition fees and home loan principal. Surprisingly, its limit of Rs 1.5 lakh has not changed since 2014. In the last decade, your salary has increased, expenses have increased and inflation has also increased, but the discount on savings remains the same.
Experts believe that now the time has come that this limit should be increased to Rs 3 lakh. This will not only help people fight inflation but will also promote the habit of saving and investing in the country.
increasing interest burden
Buying one’s own house is the dream of every Indian, but in today’s times this dream is proving to be an expensive deal. Property prices are skyrocketing and home loan interest rates are also not low. At present, tax exemption of up to Rs 2 lakh is available annually on home loan interest. Considering the increasing EMI and interest burden, this relief now seems like a straw in the camel’s mouth.
Demand is being raised that this limit should be increased to Rs 3 lakh. Not only this, if the government also implements this exemption in the new tax system, then it will be no less than a lifesaver for home buyers.
Old scope of health insurance
The rebate available on health insurance premium under Section 80D is also inadequate as per today’s medical expenses. Currently this limit is Rs 25,000 for self and family and Rs 50,000 for elderly parents. Considering the speed at which hospital bills and medicine expenses have increased, this limit is very low. Many times people have to break their savings or take a loan for treatment. The increase in this limit can provide great relief to the common man.
Similarly, the additional exemption of Rs 50,000 available in NPS for retirement (Section 80CCD 1B) has also become obsolete. By increasing it to Rs 1 lakh, people will be secure in their old age.
Also read- India changed the tax system in 2025, new income tax law will be implemented from April 1