Budget 2023: Taxpayers want tax deduction limit doubled under 80C, finds survey

Ahead of the Union Budget 2023, a significant number of retail investors want the Finance Minister to enhance the tax deduction limit under section 80C of the Income Tax Act.

This was one of the key findings in a recent survey by financial planning start-up Kuvera, which conducted the survey related to Budget expectations in January among its 16 lakh users.

The poll found that more than two out of three respondents wished for increasing the tax deduction limits under section 80C of the Income Tax Act.

“Responders said they would prefer if the limit use doubled from its current ₹1.5 lakh. The current limit hasn’t changed since 2014 and taxpayers are clearly expecting some relief from the upcoming budget,” said Gaurav Rastogi, Co-founder, Kuvera.

Another significant expectation of taxpayers, according to the survey, is making the scheme for switching from regular to direct of the same fund tax free. Three out of every 10 responders voted for this change. Currently the scheme is taxable.

Finance minister Nirmala Sitharaman will present the Union Budget 2023 on February 1 and, just like each year, individuals will be hoping for tax sops that the government might announce amid rising fears of economic slowdown.

Interestingly, the survey found that while the government may be announcing new measures to bring down the budget deficit to below 5 per cent, fiscal prudence was not a top priority for taxpayers.

Less than one in 10 said they wished for the finance minister to reduce the budget deficit to 5% or below.

“According to our survey, taxpayers, at least among our user base, were more interested in tax sops than the country’s budget deficit. With the fear of recession looming large, it would be good to announce tax relief and encourage people to save more,” said Rastogi.

Also Read: Union Budget 2023: Buoyant tax collections cushion Govt on fiscal front, Income Tax Return reforms likely this year