Senior citizens have a reason to cheer as Finance Minister Arun Jaitley announced many measures that will reduce the income tax burden on senior citizens. From higher exemption limit on fixed deposit interest to increased deduction on medical expenditure, the Budget has announced several tax benefits for the senior citizens.
These are the proposed benefits for senior citizens in Budget 2018:
1) Exemption of interest income on deposits with banks and post offices to be increased from Rs 10,000 to Rs 50,000. Also, TDS (tax deductible at source) shall not be required to be deducted on such income, under section 194A. This will include interest from all fixed deposits schemes and recurring deposit schemes.
2) Earlier an amount of Rs 30,000 per annum was allowed as a deduction for purchasing health insurance for senior citizens under section 80D. Budget 2018 proposes to raise this limit to Rs 50,000. All senior citizens will now be able to claim the benefit of deduction up to Rs 50,000/- per annum in respect of any health insurance premium and/or any general medical expenditure incurred.
3) The Budget 2018 proposed to increase the limit of deduction for medical expenditure in respect of certain critical illness from, Rs 60,000 in case of senior citizens and from Rs 80,000 in case of very senior citizens, to Rs 1 lakh in respect of all senior citizens, under section 80DDB.
4) Arun Jaitley proposed to extend the benefits of Pradhan Mantri Vaya Vandana Yojana up to March, 2020 under which an assured return of 8 percent is given by Life Insurance Corporation of India. Also, the existing limit on investment of Rs 7.5 lakh per senior citizen under this scheme was proposed to be enhanced to Rs 15 lakh.
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