While in his budget speech, Finance Minister Jaitley kept the tax slabs and the rates unchanged for taxpayers for the FY 18-19, he did introduced a host of changes that is seen to impact common man hugely as the standard deduction for salaried class and the earlier LTCG implication on equity has again been reinstated. Plus there are other new changes as well and senior citizen class is also set to benefit with some of the positive provisions for them that will come into effect from April 1, 2018:
For the purpose of taxation, senior citizen class has been sub-divided in respect of age those falling in the 60-80 years age bracket falls in the senior citizens category and those above 80 years as super senior citizens.
There is no tax liability for the senior citizen category class if the income earned in a year is less than Rs. 3 lakhs while for the super senior citizen the cap has been kept at Rs. 5 lakhs.
1. Section 80 TTB in respect of interest on savings account : The new section introduced in the Budget 2018 extends the tax-free limit in respect of interest earned on bank deposits, savings accounts, RDs and deposits with post office upto Rs. 50000 in a year. This means any income tax liability on the interest receipts on deposits shall accrue only if the sum exceeds the given limit for a financial year.
Currently a deduction upto Rs. 10000 in a year is allowed to all Indian citizens for interest earned on deposit accounts held with bank, cooperatives or Post office.
It is to be noted that u/s 80TTA, senior citizen will now not be entitled for deduction in respect of interest earned from savings accounts.
2. Section 80D for medical insurance: The tax-saving section that provides for deduction from the gross income to arrive at the taxable income for the health insurance premium paid is allowed for all Indian individuals. However, the limit for the senior citizens has been again enhanced from the current limit of Rs. 30000 to Rs. 50000 in the Budget 2018. So, to meet out emergency situation, it is advised to choose the best health plan after taking into account your health condition and save on tax at the same time.
3. Section 80 DDB for medical expenses: For medical treatment of some of the specified diseases, senior citizens are allowed a deduction and the limit in the Budget 2018 has been increased to Rs 1 lakh for both the senior citizen category. The list of diseases include malignant cancer, neurological ailments, hematological problems, AIDS. The limit has been increased in view of the increasing healthcare cost.
Furthermore, the deduction upto the specified limit can be availed if the expense is incurred by the senior citizen taxpayer for the treatment of a specified disease for spouse, dependent children, brother sister or self.