Budget 2019 expectations: 3 big income tax changes

1. National Pension Scheme: withdrawals under the NPS attract partial taxes at the time of withdrawal. 

There is a proposal in pipeline for exempting entire 60% of the corpus withdrawn as tax exempt which is yet to be announced by the Government.”

2. Increase in 80C limit:

The overall limit under Section 80C remains to be Rs 1.5 lakh which the government is expected to increase to Rs 2 lakh.

The deduction under Section 80C provides for various types of payments by the taxpayer covering expenses (e.g. children tuition), investment and housing (e.g. housing loan repayment) and retirement fund contributions (e.g. PPF), the overall limit of INR 1.5 lakh (excluding NPS contribution) is very low

3. Increase in 80D limit:The Government may increase the current limit of deduction for health insurance premium from INR 25,000 to 35,000.

The Union Budget 2019 will be presented by Finance Minister Nirmala Sitharaman on July 5. 

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