Union Budget 2021 is important news for those taking Term Plan. That is, under ULIP (Unit linked Insurance Policy) section 10 (10D) it is proposed to remove the tax exemption on a premium of more than 2.5 lakh rupees in 1 year.
Union Budget 2021 is important news for those taking Term Plan. That is, under ULIP (Unit linked Insurance Policy) section 10 (10D) it is proposed to remove the tax exemption on a premium of more than 2.5 lakh rupees in 1 year. While this will not apply to the existing ULIP, it will be effective only on policies taken after 1 February 2021. That is, the premium amount above Rs 2.5 lakh will be taxed.
Apart from this, if you are a salary class and get more PF deducted then you may have to pay tax. Yes, Finance Minister Nirmala Sitharaman has imposed a cap on PF deduction in the budget presented on Monday. PF deduction above Rs 2.5 lakh will attract Income Tax.
Under Clauses 10 and 11 of the Provident Funds Act, 1925 (19 of 1925), interest on EPF is completely tax free. According to the government, it has been seen that some employees get more PF deductions and they are getting good interest. Voluntary PF cuts are more among those doing this. This move of the government will affect people with high-income salary, who get voluntary PF deducted for Tax Free instrument.
Finance Minister Nirmala Sitharaman has also taken special care of home buyers in Union Budget 2021 presented on Monday. The government has kept Affordable Housing in the top priority, moving the philosophy of the house to everyone. In July 2019, the Finance Minister has increased the limit of additional exemption up to 1.5 lakh on interest under section 80EEA for 1 year. Now the benefit of this scheme will be given till 31 March 2022.
The government had brought section 80EEA in the budget 2019 for Affordable Housing. Under this, a rebate of Rs 1.5 lakh on interest repayment is available separately. This exemption is different from section 24B. There is a discount of Rs 2 lakh in every business year on the interest repayment of home loan for section 24B. The government has not made any change in the definition of affordable housing even in this budget. Affordable housing has been categorized by the government on the basis of the carpet area and the price of the house.
