Section 80(C) of the IT Act, 1961

Section 80(C) of the IT Act provides various tax deductions and exemptions. The present tax deduction limit on investments is 1,00,000. As the limit of PPF (Public Provident Fund) has been increased from 70,000 to 1,00,000, E&Y is hoping for an increase in its deduction limit too. The proposed limit of deduction has been 2,00,000 in order to promote long-term saving.

Compensation for Medical Expenses

As medical costs are escalating with the passing moment, an increase in its deduction limit has also been suggested by E&Y. The present deduction limit may be raised from 15,000 to 50,000. The same suggestion was made by the body of DTC too. The Finance (No.2) Act of 1998 had increased the exemption limit from 10,000 to 15,000 during that period. As value of money keeps decreasing, value of deductions should go up.