Budget 2019 Predictions Part IV | Deductions


One of the most awaited and closely watched announcements in every Budget are Deductions. With budget 2019 the predictions on deductions are quite high, as this being the interim and last budget of the ruling government. In this blog, we bring to you one stop expectation of our Experts on all deductions to be pronounced in the upcoming budget.

Section 80C

The limit of section 80C is currently Rs 1,50,000. It promotes investment by citizens together with good returns. Some of the popular and highly availed investment options under 80C are LIP (Life Insurance Premium) NSC (Nation Saving certificates) PPF (Public Provident Fund) Mutual Fund etc Our experts are of the opinion that with this budget an increase in limits of section 80C should be seen to the extent of Rs 50,000. Which will bring the new deduction u/s 80C threshold to Rs 2,00,000. The reason being governments constant emphasis to promote savings at the same time it will also ensure direct tax saving benefits to income tax filers.

Section 80D

With the investment in medical policies getting popular the limits u/s 80D have seen increment over different budgets. The current limits are Rs 25,000 for those upto 60 years of age Rs 30,000 for those who are aged 60 & above It is expected that announcements in budget 2019 shall be made in respect of Section 80D limits. In our opinion, they shall be at least made at par for all citizens i.e. Rs 30,000 limit also to be introduced for those aged upto 60 years. Preventive Health Check Up One more deduction benefit gives under section 80D is of Preventive health check-up. It is given to the extent of Rs 5,000. In view of the increasing medical expenditures by individuals, it is expected that government can raise this benefit to the extent of Rs 10,000.

Section 80TTA

Keeping in view the government’s digitalization policy and considering the fact that significant money is held in digitalized form these days. It is expected that the deduction under section 80TTA for tax-free interest on savings bank accounts should be increased. The new limit can be made upto Rs 15,000.

Section 80TTB

The last Budget announced a new tax benefit of interest income to senior citizens. The ceiling limit for benefit u/s 80TTB was restricted to Rs 50,000. With this budget, we expect that the same benefit is also extended for other citizens too on the same lines.

Section 80DDB

Under section 80DDB tax benefit is allowed for expenses made in respect of specific diseases. Currently, the limit for claiming tax benefit is Rs 40,000 for citizens upto the age of 60 Rs 1,00,000 for senior citizens With Budget 2019 benefit of this deduction can be made rational for all citizens. I.e. for those aged below 60 te benefit upto Rs 1,00,00 can also be allowed.

Section 80GG

Tax benefit on rent paid under section 80GG can be availed upto Rs 5,000 pm currently. Predictions from Budget 2019 has been made to increase the same to Rs 10,000 pm.

Section 80E

Currently, education loan repayment interest benefit can be availed under section 80E for 8 years. From Budget 2019 it is expected that the benefit for the longer period shall be announced. The revised period can range up to 15 years.

Standard Deduction

Budget 2018 reintroduced standard deduction after a long while. It has given benefit to salaried employees for Rs 40,000 in lieu of previously existing Medical Reimbursement and Transport Allowance. With budget 2019 it is expected that the government might increase the standard deduction benefit to Rs 45,000 or 50,000.

NPS

The investment in NPS is becoming more and more attractive for the tax savers. Keeping with the pace it is expected that the government in its upcoming budget further increase the deduction benefit by Rs 50,00 for NPS subscribers.

Housing loan benefits

Presently, upto Rs 2,00,000 interest can be set off by those repaying housing loans. In the proposed budget it is expected that the limit is increased to Rs 2,50,000 or Rs 3,00,000. For those claiming it in respect to let out property, the limit can be increased to Rs 3,00,000. For all comprehensive predictions of Budget 2019 regarding Income Tax Slab, Tax Rates, Allowances, and Deductions Read our Blog.

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.