By Admin 
Budget 2026: As Budget 2026 is coming closer, people’s restlessness is increasing. Especially, middle class taxpayers have very high expectations from it. One of these expectations is related to Section 80C of the Income Tax Act, which allows people to save tax by investing in many different types of savings schemes like PPF, ELSS, Life Insurance, NSC.
Will the government give relief to the people?
According to reports, in this year’s budget, Finance Minister Nirmala Sitharaman may increase the limit of Section 80C of the Income Tax Act from Rs 1.5 lakh to Rs 3 lakh. If the deduction limit is indeed increased then it will be no less than a gift for the taxpayers in the old tax regime. Ahead of the Budget, taxpayers are eager to know whether the government addresses the old demands related to tax-saving deductions with rising inflation and rising household expenses.
What is Section 80C and why is it important?
Section 80C allows taxpayers opting for the old tax system to claim deduction on investments made in popular savings instruments like Public Provident Fund (PPF), Equity-Linked Saving Schemes (ELSS), Life Insurance Premium, National Savings Certificate (NSC) and some Post Office Saving Schemes.
Currently the maximum deduction under section 80C is limited to Rs 1.5 lakh every financial year. It was last changed in Budget 2014. That is, after 12 years, it is still stuck at Rs 1.5 lakh. While during this period, expenses related to education, healthcare, insurance and retirement planning have increased rapidly, but due to reduced deduction limit, taxpayers are not getting the benefit.
Will the government increase the limit of 80C?
There has been a demand for increasing the limit of Section 80C deduction for a long time. With suggestions from industry bodies and tax experts, the American Chambers of Commerce in India (AMCHAM) has formally urged the government to increase the Section 80C limit to Rs 3.5 lakh.
According to AMCHAM, this move will directly benefit salaried professionals and middle-income families, who rely heavily on tax-saving investments to manage their finances wisely. If the deduction limit increases, taxable income will reduce. This will save more money in hand and will also promote long-term savings.
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