Finance Minister Nirmala Sitharaman is set to unveil Budget 2025 in the Lok Sabha on February 1. This will mark her eighth presentation of the budget, establishing a new record. There are significant expectations from this budget among industry stakeholders and taxpayers, particularly in the context of Modi Government 3.0.

In our daily lives, we encounter various forms of taxation. From the moment we wake up until we go to bed, we are subject to multiple taxes. However, are you aware of the different types of taxes in India? Let’s explore them:

 

India categorizes taxes into three main types: direct taxes, indirect taxes, and other taxes.

 

1. Direct Taxes

Direct taxes encompass income tax, corporate tax, capital gains tax, wealth tax, gift tax, and securities transaction tax.

 

2. Indirect Taxes

Indirect taxes include service tax, import duty, sales tax, VAT, GST, and customs duty.

 

Other Taxes

Additional taxes consist of entertainment tax, education tax, professional tax, property tax, registration fees, and toll tax. Indirect taxes constitute the largest portion of government revenue, with GST being a significant component that applies to a wide range of goods and services, including medicines, vehicles, restaurant meals, clothing, and mobile phones.

 

Finance Minister Nirmala Sitharaman is considering raising the Section 80C limit of the Income Tax Act from Rs 1.5 lakh to Rs 3 lakh in the upcoming Budget 2025. This could be fantastic news for millions of taxpayers across the nation.

 

What are the advantages of Section 80C?

Section 80C allows taxpayers to save up to Rs 1.5 lakh on their taxes. This includes a variety of savings options like the Public Provident Fund, Equity Linked Savings Scheme, Life Insurance Premiums, National Savings Certificates, and Children’s Education Fees. This benefit is available to individual taxpayers as well as Hindu Undivided Families.

 

When was the last adjustment made to the limit?

The limit was increased from Rs 1 lakh to Rs 1.5 lakh by former Finance Minister Arun Jaitley in 2014, and it has remained the same since then.