Budget 2026: The countdown to Union Budget 2026 has started and with it the expectations of crores of taxpayers of the country have also started rising. Finance Minister Nirmala Sitharaman is going to present the country’s general budget for the ninth consecutive time on February 1. In the last few years, the entire emphasis of the government has been on popularizing the new tax regime, but this time the working class who chose the old tax regime can get a big good news. There is talk that in this budget the government can drastically increase the limit of the most popular tax saving section 80C, which will directly save more money in your pocket.
Limit may increase from Rs 1.5 lakh to Rs 2.5 lakh
Before the budget, American Chambers of Commerce in India (AMCHAM) has put forward an important proposal before the government. The organization has advised the Finance Ministry to increase the limit of tax-savings deduction from the current Rs 1.5 lakh to Rs 2.5 lakh. Currently, under Section 80C of the Income Tax Act, any taxpayer can claim tax exemption only on investments up to a maximum of Rs 1.5 lakh in a financial year. This rule is very important for those who still file their returns under the old tax system. If the government accepts this recommendation, it will be no less than a big gift for the middle class.
No relief received since 2014
The logic behind this demand is very strong. Actually, the limit of Rs 1.5 lakh under Section 80C was fixed in the year 2014. From then till now, that is, in the last more than 10 years, both inflation and the average income of the people have increased significantly, but the limit of tax exemption on investment has remained the same. AMCHAM says that the tax burden on people has increased during this period, but the relief measures remain the same. In such a situation, this change is not only the need of the hour, but will also be justice to the taxpayers. By increasing the limit, people will be able to save a large part of their hard-earned money from going to tax.
There will be a direct impact on savings
Section 80C is not only a means of saving tax, but it also promotes the habit of saving in Indian families. About a dozen investment options come under this section, which include schemes like Public Provident Fund (PPF), Mutual Fund Tax Saving Scheme (ELSS), Life Insurance Premium and Sukanya Samriddhi Yojana. Apart from this, exemption is also available on school tuition fees of up to two children and principal amount of home loan under this section.
Experts believe that if the limit is increased to Rs 2.5 lakh, then people will be encouraged to invest for the long term. This will not only save them today’s tax, but will also help in creating a big fund for retirement.