In the Union Budget presented today, a few benefits were announced with a focus on senior citizens in India. There were major announcements on health expenditure, insurance and TDS on deposits. Here are the changes in taxes for senior citizens over 60 years of age.
The biggest announcement was that all senior citizens could claim the benefit of reduction Rs. 50,000 per year with respect to any general health expenditure and health insurance premium. This deduction limit for health insurance premium was Rs 30,000 for FY 2017-18 under section 80D.
A standard deduction of Rs 40,000 announced will benefit pensioners.
Fixed Deposits and Post Office Deposits
Another major announcement says that there will be no TDS (Tax Deducted at Source) on Fixed Deposits and Post Office deposits interests up to Rs 50,000 for senior citizens. The limit earlier was Rs 10,000.
"TDS will also be not required to be deducted under section 194A. The benefit will be available for interest from all fixed deposit schemes and recurring deposit schemes," Jaitley said.
Medical expenditure for critical illness
An additional increase in deduction limit for medical expenditure for certain critical illness went up to Rs 1 lakh under section 80DDB. The earlier limit was Rs 60,000 for senior citizens and Rs 80,000 for super senior citizens.
Pradhan Mantri Vaya Vandana Yojana
Pradhan Mantri Vaya Vandana Yojana (explained below) has been extended up to March 2020 with the current limit to be increased to Rs 15 lakhs from present Rs 7.5 lakhs.
Union Budget 2017
In the budget 2017, FM Arun Jaitley had made a social security announcement for senior citizens in India.
Life insurance Corporation (LIC) implemented a Pradhan Mantri Vaya Vandana Yojana scheme for senior citizens (over 60 years of age) that provides assured pension, with a guaranteed return of 8% per annum for ten years
Another announcement included an introduction of Aadhaar based smart cards containing health details would be introduced for that for senior citizens beginning with 15 pilot districts in the year 2017-18.