As the rumblings of a potential out and out populist budget continues to disconcert a number of economists, the common man holds his breath in anticipation of the most awaited personal finance related event of the fiscal. It's a well-known fact that that both tax savings and tax efficiency serve as potent drivers of investor behaviour in our country - sometimes, even at the cost of making irrational money decisions in the bargain! Though, in my experience, pre-budget wish lists are seldom heeded; here's one that may serve the interests of savers and investors without hurting the exchequer too much (the obvious point related to changes in tax slabs has been duly excluded!)
A rationalisation of Section 80C
The Rs. 1.5 Lakh limit for Section 80C is abysmally low, and really creates little value for most individuals. More often than not, PPF deductions and home loan EMI principal payments cover this relatively small figure, leaving little or no incentive for investors to make any further tax-saving led, long-term savings. It's about time that the Section 80C limit was hiked to at least Rs. 2.5 Lakhs. Doing this may lend indirectly lend a fillip to the residential real estate market as well.
