As the Union Budget approaches, expectations are growing that the government may extend tax relief. Significant anticipation surrounds potential changes to tax-saving provisions, particularly Sections 80C and 80D.

Under the existing framework, Section 80C allows individuals to claim deductions up to Rs 1.5 lakh for investments in specified savings instruments such as Public Provident Fund (PPF) and life insurance premiums. Experts suggest that raising this limit could enhance financial planning among individuals, especially in light of rising living costs and inflationary pressures.

Similarly, Section 80D provides tax deductions for health insurance premiums. Currently, you can claim:

Up to Rs 25,000 for premiums paid for yourself, your spouse, dependent children, or parents.

Up to Rs 50,000 if your family or parents are senior citizens (aged 60 years or above).

Though no official announcements have been made yet, raising the Section 80C limit remains a key demand from both taxpayers and industry leaders. Such a measure could ease financial burdens on individuals while encouraging investments in instruments that promote national savings and economic growth.

“The upcoming Union Budget 2025 is likely to bring attention to key tax-saving provisions such as Sections 80C and 80D. Given the evolving financial landscape, there is a strong demand for increasing the deduction limit under Section 80C from the current Rs 1.5 lakh to Rs 2 lakh, which could encourage higher savings and investments in eligible instruments. Similarly, with rising healthcare costs, a relook at the deduction limit for health insurance premiums under Section 80D seems warranted,” said Niyati Shah, vertical head - Personal Tax at 1 Finance.

“The expectations are high that the budget will introduce revised tax slabs aimed at reducing the burden on individuals, especially the middle class while encouraging greater consumer spending and investment. The government may increase the deduction limit under section 24(b) on interest on home loans from Rs 2 lakhs to Rs 3 lakhs to promote homeownership and help the growth of the real estate sector,” said Mohammed S Chokhawala, tax expert, ClearTax.

“As Budget 2025 reaches closer, one could see a lot of anticipation built up regarding probable changes in tax-saving schemes like Section 80C and Section 80D. Speculations are also high regarding the introduction of new provisions to aid emerging financial priorities such as green investments and digital initiatives. These would bring dual benefits: disposable income and aligning individual financial goals with the overall economic vision of sustainability and technological advancement,” said Rajesh Katoch, CEO, EZ Capital.

The Union Budget 2025 will be presented to Parliament in the coming weeks, providing definitive answers to these questions and setting the direction for India's tax policy in the years ahead.