Public Provident Fund (PPF) account limit double at Rs 3 lakh from Rs 1.5 lakh? Income tax return 80C cap at Rs 2.5 lakh? This Budget demand is full of joy!

PPF Account: Will Public Provident Fund (PPF) account holders get big relief on February 1st, 2021? Well, if Finance Minister (FM) Nirmala Sitharaman complies with the pre-budget recommendations of the prestigious Institute of Chartered Accountants of India (ICAI), it may happen. 

The ICAI has recommended that income tax payers' annual limit of Rs 1.5 lakh in PPF account should be doubled and raised to Rs 3 lakh from Rs 1.5 lakh. The ICAI also recommended the Narendra Modi Government to raise the annual income tax return Section 80C limit from Rs 1.5 lakh to Rs 2.5 lakh. If FM Sitharaman complies with ICAI's suggestions, then there can be some big announcements coming in on Budget presentation day in regard to direct tax front for the middle class.

In its pre-budget proposals to the Finance Ministry of India, the ICAI said that there is need to increase the tax exemption limit for the taxpayers as it would help increase their saving appetite. It suggested the central government to increase one's PPF annual limit from Rs 1.5 lakh to Rs 3 lakh — which means doubling the annual PPF account investment limit.

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Apart from PPF account investment limit, ICAI has also recommended FM Sitharaman to raise Section 80C limit from Rs 1.5 lakh per annual to Rs 2.5 lakh. They said that it would also do the same as said in regard to the PPF account investment limit.

Suggesting Nirmala Sitharaman to provide relief in Section 80D, especially after the COVID-19 pandemic, the ICAI has proposed to provide further relief in Section 80C of the Income Tax Act as Rs 25,000 annual medical cover premium is not enough now. ICAI has proposed FM to make money paid in medical cover premium should be 100 per cent tax exempted.