Earning Less than 8 Lakh? Your Tax will Go Up
Bangalore: The taxpayers have one more reason to get frustrated with the recent budget. The Finance Minister not only kept the tax-saving limit under Section 80C unaltered, but the deduction under Section 80CCF for infrastructure bonds has been removed. This will cut down the total tax savings from 1.2 lakh to 1 lakh which will thrust up the payable tax for individuals.
The deduction was increased two years ago and it has to be extended every year through an amendment. Tax experts had dreaded the worst when the finance minister did not mention it in his budget speech this year. Finance Ministry sources now authenticate that the 20, 000 deductions has been allowed to tumble this year.
It has come clean by now that the change will not burn those with an income of less than 5-6 lakh a year. The taxpayers in this section generally did not invest in infrastructure bonds in a huge way as the tax benefit is lesser for this slab. In a lot of cases, these taxpayers failed to exhaust even their 1 lakh deduction limit under Section 80C.
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