In 2020 when the Covid 19 outbreak led to severe financial disruption at both industrial and individual level alike, the focus should be propel growth by making credit available easily, thereby boosting economic growth and households savings in the long run.
1. Increase 80C Limit To Increase Savings:
Various authorities have been advocating an increase in 80C limit that provides deduction from the gross income for investment into various specified avenues or for some expenses to be increased to from the current limit of Rs. 1.5 lakh to Rs. 3 lakh. And amid the pandemic when people were hit hard their last resort was their savings, so the move will push for further savings for the long term.
2. First time borrowers need to be put in priority lending ambit:
Like for the different industries, they are put in the priority sector lending to boost growth in those sectors such as start-ups for instance, finance lending should also be made simpler for lower income groups and first time loan applicants. This is even as the post Covid 19 lending scenario involves stricter underwriting process for sanctioning of loans. So, to provide easy access to these segments, credit supply to them can be made part of the priority sector lending target of banks.
3. Separate deduction for home loan:
In the current regime, principal repayment can be claimed as part of section 80C while for interest, a deduction of up to Rs. 2 lakh is available under Section 24b. And now as the Section 80C is already having so many facets to it, one is left with little scope to claim deduction for home loan principal repayment. So, there is been made a call for separate section to include deduction for home loan with a combined deduction limit of up to Rs. 5 lakh on principal and interest repayment.
4. Withdrawal of LTCG on all equity schemes:
Experts are of the view that imposition of LTCG at 10% from equities exceeding Rs. 1 lakh in a fiscal year has put mutual funds at a tax disadvantage and so there is an expectation that LTCG should be done away with on all equity schemes.