Going against the expectations of salaried class, Finance Minister Nirmala Sitharaman did not announce any major alteration in personal taxation in Budget 2021 . There were no changes in income tax slabs, PPF limit, Section 80C exemption. This comes despite experts asking for increased money in the hands of the salaried class to boost consumption.
The Finance Minister, however, gave some relief to senior citizens. Senior citizens of 75 years and above who only have pension and interest income will not be required to file returns. The Finance Minister also offered relaxation to home buyers by announcing the extension of Rs 1.5 lakh deduction on payment of interest for affordable housing by a year.
Everyone had their eye on personal taxation this year as the government aimed to put more money in the hands of the citizens that would have boosted consumption in a coronavirus-ravaged economy. Giving a fillip to household savings, the government was expected to increase tax exemption limit under Section 80C to Rs 2 lakh from Rs 1.5 lakh.
Additionally, the PPF contribution limit was also expected to be doubled to Rs 3 lakh from Rs 1.5 lakh. Enhancement of PPF account investment limit would have boosted household savings and encouraged investment. PPF investment limit was last increased by the late former Finance Minister Arun Jaitley in Budget 2015, when he increased it from Rs 1 lakh to Rs 1.5 lakh. This increase was done keeping in mind the hike in cumulative tax exemption limit under Section 80C from Rs 1 lakh to Rs 1.5 lakh.
Meanwhile, Finance Minister Sitharaman proposed a faceless income tax appellate tribunal. The timeline to reopen tax cases have been cut to three years from six years.
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