Government Pension Scheme APY

The Government of India is extremely concerned about the old age income security of the working poor and is focused on encouraging and enabling them to join the National Pension System (NPS).  To address the longevity risks among the workers in unorganised sector and to encourage the workers in unorganised sector to voluntarily save for their retirement, who constitute 88% of the total labour force of 47.29 crore as per the 66^th Round of NSSO Survey of 2011-12, but do not have any formal pension provision, the Government had started the Swavalamban Scheme in 2010-11. However, coverage under Swavalamban Scheme is inadequate mainly due to lack of clarity of pension benefits at the age after 60.

The Finance Minister has, therefore, announced a new initiative called Atal Pension Yojana (APY) in his Budget Speech for 2015-16. The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA) and who are not members of any statutory social security scheme. Under the APY, the subscribers would receive the fixed pension of    Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would vary on the age of joining the APY. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more. The benefit of fixed pension would be guaranteed by the Government. The Central Government would also co-contribute 50% of the subscriber’s contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from 2015-16 to      2019-20, who join the NPS before 31^st December, 2015 and who are not income tax payers. The APY would be launched from 1^st June, 2015. The existing subscribers of Swavalamban Scheme would be automatically migrated to APY, unless they opt out.

Benefit of APY:   Fixed pension for the subscribers ranging between Rs. 1000 to Rs. 5000, if he joins and contributes between the age of 18 years and 40 years. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.

Eligibility for APY:       Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme. 

Age of joining and contribution period:   The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

Focus of APY:     Mainly targeted at unorganised sector workers.

Enrolment and Subscriber Payment:       All bank account holders under the eligible category may join APY with auto-debit facility to accounts, leading to reduction in contribution collection charges.

Enrolment agencies:    All Points of Presence (Service Providers) and Aggregators under Swavalamban Scheme would enrol subscribers through architecture of National Pension System.  

Operational Framework of APY:   It is Government of India Scheme, which is administered by the Pension Fund Regulatory and Development Authority. The Institutional Architecture of NPS would be utilised to enrol subscribers under APY.

Funding of APY: Government would provide (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the subscriber contribution or Rs. 1000 per annum, whichever is lower, to eligible subscribers; and (iii) would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.

Age of Joining, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the nominee of subscribers

The Table of contribution levels, fixed monthly pension to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period is given below. For example, to get a fixed monthly pension between   Rs. 1,000 per month and Rs. 5,000 per month, the subscriber has to contribute on monthly basis between Rs. 42 and Rs. 210, if he joins at the age of 18 years. For the same fixed pension levels, the contribution would range between        Rs. 291 and Rs. 1,454, if the subscriber joins at the age of 40 years. 

Delhi Free Tirth Yatra Yojana – Devasthan Pilgrimage for 77000 Senior Citizens

Delhi government has launched Free Tirth Yatra Yojana to provide pilgrimage trips to senior citizens. Subsequently, the state govt. will bear the cost of 77000 Senior Citizens every year who want to visit devasthan pilgrimages. In addition to this, govt. will also pay for the attendants who are above 18 years of age and accompanying the pilgrims.

Under this scheme, Senior Citizens who are working or retired employees of Central, State or any other local governmental or autonomous body can not avail the benefits of this devasthan tirth yatra scheme.

Only citizens having annual income of less than 3 lakh p.a can take the benefits of this scheme. This scheme will basically help the poor people who are unable to visit pilgrimages due to high cost.

Mukhyamantri Free Tirth Yatra Yojana – Devasthan Trips

All the senior citizens can opt for one of the following 5 places for visit purpose which are as follows:-

1.  Mathura-Vrindavan-Agra-Fatehpur Sikri
2. Haridwar-Rishikesh-Neelkanth
3. Ajmer Sharif-Pushkar
4. Amritsar-Wagah Border-Anandpur Sahib
5. Vaishno Devi-Jammu

Govt. will provide this free tour for 3 days and 2 nights. Accordingly, this scheme will cost state govt. around Rs. 7000 per pilgrim.

Delhi Free Tirth Yatra Yojana – Details

The important features and highlights of this devasthan tirth yatra scheme are as follows:-

• This scheme will provide free pilgrimage trips to around 77000 senior citizens per year.
• Subsequently, the annual income of the eligible citizens from all sources must not exceed      Rs. 3 lakh.
•  In addition, delhi govt. will also bear the cost of the attendants (above 18 years) who accompanies the senior citizens during their tour.
• Senior citizens working under any governmental body (Central/State/Local) are not eligible.
• Delhi Tourism and Transportation Development Corporation is going to organize these 3 days and 2 nights trips.
• This scheme will get funded from the existing funds of Tirth Yatra Vikas Samiti.
•  Moreover, this scheme is expected to cost Rs. 7000 per pilgrim to the state exchequer.

All the candidates can apply online or through office of divisional commissioner, MLA or Tirth Yatra Committee. Furthermore, the selection process involves the draw of lots. The state govt. is going to launch this scheme soon.

Central Government Health Scheme For Senior Citizens

        

Senior citizens and retired personnel who have worked in Central Government bodies are assured of their health care needs through the Central Government Health Scheme or CGHS. This scheme for pensioners provides medical assistance to retired central government officials along with their dependents, freedom fighters and widows of government officials. The CGHS Scheme also covers Delhi police personnel, retired judges of the Supreme Court, Parliament secretaries and their families.

Moreover, along with Ex–Governors and Ex–Vice Presidents of India, accredited journalists are also eligible to be covered under the Central Government’s Health Scheme. The Central Government Health Scheme initially started functioning in Delhi. After a few years, it spread to cities such as Allahabad, Ahmedabad, Bangalore, Mumbai, Chennai, Kolkata, Hyderabad, Jaipur and Patna.

The Central Government Health Scheme offers health services through Allopathic and Homeopathic systems as well as through traditional Indian forms of medicine such as Ayurveda, Unani, Yoga and Siddha. These medical facilities are provided through dispensaries and polyclinics. Chief medical officers and medical officers operate these dispensaries and are responsible for the smooth functioning of the scheme.

The main components of the scheme are dispensary services including domiciliary care, specialist consultation facilities, X–ray, Electro Cardiogram (ECG), laboratory testing, hospitalization, purchase and distribution of medicines and provision of health education.

Concessions to Senior Citizens by BSNL & MTNL

Department of Telecommunications has made special provisions for senior citizens who apply for a new telephone connection. The department has earmarked separate priority category for senior citizens wherein they can apply for registration.

(b) In case of any complaint or fault with the telephone a senior citizen’s complaint is redressed on a priority basis.

Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Limited (BSNL) are distinct, independent, commercial entities operating in mutually exclusive geographical areas. These Public Sector Undertakings (PSUs) have their own commercial policies for providing various concessions to senior citizens.

MTNL (Delhi) gives 25% discount in rentals (Tariff Plan-250 only) and installation to Senior Citizens who are 65 years or above in age. Please submit proof of age when applying to MTNL for availing this concession. Application form  for a new connection (MTNL Delhi) in senior citizen category is available here.

MTNL (Mumbai) has a Non-OYT-Special category for Senior Citizens aged 65 years or above.  To apply for a new connection in Mumbai, senior citizens can fill this application form. Whereas to avail senior citizen concession on an already existing telephone connection (MTNL Mumbai) this application form needs to be filled in.

Kindly note that these filled in forms are to be submitted to the MTNL offices in your city or sanchar haat. In case of any specific query you may also call toll freeMTNL Help line 1500 from any MTNL number.

BSNL: Senior citizens of the age of 65 years and above are entitled for registration of telephone on priority under Non-OYT Special category. They are exempted from payment of registration charges.

The Government does not intend to intervene in the commercial decisions of the two PSUs.

7 Special Tax benefits for Senior Citizens

The Indian Income Tax Act gives certain tax benefits to Senior Citizens and also tries to ensure that income tax e-filing is a hassle free process. The complete list of all the tax benefits available to senior citizens is compiled in this article.

Who is a Senior Citizen for Income Tax purpose?

For the purpose of Income Tax, there are 2 categories of Senior Citizens

1. Senior Citizens: Those above 60 years of age
2. Super Senior Citizens: Those above 80 years of age

Tax Benefits for Senior Citizens

1. Benefits of Slab Rates

The income tax slab rates for senior citizens are differential for senior citizens as compared to non-senior citizens. The slab rates are as follows:

Particulars	Non-Senior Citizen	Senior Citizen	Super-senior Citizen
Tax Free	Up to 2.5 Lakh	Up to 3 Lakh	Up to 5 Lakhs
5% Tax	2.5 Lakh to 5 Lakh	3 Lakh to 5 Lakh	NA

As the slab rates are beneficial to Senior Citizens, this converts into a tax saving of Rs. 5000 for the Senior Citizens and Rs. 30,000 for the Super Senior Citizens. For complete income tax slabs refer: Income Tax Slab Rates

2. Interest Income exempted upto Rs. 50,000

With effect from Financial Year 2018-19, new Section 80TTB has been introduced which allows for deduction for interest of Rs. 50,000. The amount earned over Rs. 50,000 would be taxable as per the Slab Rates of the Senior Citizens.

For eg: If a senior citizen earns interest income of Rs. 75,000, out of this – Rs. 50,000 would be allowed as a deduction under Section 80TTB and the balance Rs. 25,000 would be taxable as per the slab rates.

However, it is important to note that no deduction under Section 80TTA of Rs. 10,000 for Interest on savings account would be allowed in such cases.

3. Deductions under Section 80D for payment of Medical Insurance Premium

The deduction allowed under section 80D for payment of medical insurance premium is Rs 25,000 for non-senior citizens. However, this deduction increases to Rs 50,000 for Senior Citizens (increased from Rs. 30,000 to Rs. 50,000 in Budget 2018 and applicable from 1st April 2018)

Moreover, in case of very super-senior citizens i.e. people above the age of 80, deduction under Section 80D is allowed not only for payment for Medical Insurance Premium but also for the actual expense incurred on treatment by very super senior citizens.

4. Exempted from payment of Advance Tax

Senior Citizens not having business income are exempted from payment of any Advance Tax and are only required to pay Self Assessment Tax on their total income (Inserted by Finance Act 2012)

5. Non-deduction of TDS on Interest

In case the total income of a senior citizen is exempted from the levy of income tax and nil tax is payable by him for that financial year, he can submit Form 15H for non-deduction of TDS on Interest on Fixed Deposit.

In case of Senior Citizens, this form can be submitted if the Total Income after Deductions is less than the minimum amount exempted from the levy of tax whereas in case of non-senior citizens this form is applicable if the Total Income before deductions is less than the minimum amount exempted from levy of tax.

Thus, in case of Senior Citizens the benefit is higher and therefore Form 15H is to be filed in case of Senior Citizens whereas Form 15G is to be filed in case of non-senior citizens.

Recommended Read

• Form 15H for Nil/Lower Deduction of TDS
• Computation of Tax on Fixed Deposit

The threshold for deduction of taxes under Section 194A in case of senior citizens has also been raised from Rs 10,000 to Rs. 50,000. This amendment was introduced in Budget 2018 and is applicable from FY 2018-19 onwards.

6. Higher Deduction under Section 80DDB for ailment of specified disease

Section 80DDB provides deduction to an assesses in case of expense on medical treatment of specified ailments. The deduction allowed under this section earlier was Rs. 60,000 for Senior and Rs. 80,000 for Super-Senior Citizens.

This has now been increased to Rs. 1,00,000 for both Senior and Super Senior Citizens with effect from FY 2018-19. [Amendment introduced vide Budget 2018]

7. No Tax on amount received under Reverse Mortgage Scheme

Reverse Mortgage is the opposite of Home Loan. In a Home Loan, you pay EMI’s to the Bank and you own the house subsequently. Under the Reverse Mortgage Scheme, regular payment is made to Senior Citizens till lifetime by mortgaging his house while the ownership remains with the senior citizen and he also occupies the house.

As per the Reverse Mortgage Scheme, on the death of the borrower, the loan is repaid with accumulated interest through sale of the house property and the balance amount received on sale is given to the legal heirs.

The amount so paid as installments to the Senior Citizen is fully exempted from the levy of Income Tax.

Advantages Of The Post Office Senior Citizens Savings Scheme(SCSS)

Elders and senior citizens are given special consideration in our country. Saving Schemes for senior citizens in India is launched for the benefit of the senior citizen in the country. It is an effective, long-term saving option.  Know the features and benefits of this scheme.SCSS schemes are available through certified banks as well as the network post offices spread across India.

Post Office Senior Citizen Scheme is 5 years one-time deposit scheme. Know the features and benefits of this scheme.

Age

An individual of the Age of 60 years or more can open the SCSS account in Post Office. ​​An individual of the age of 55 years or more but less than 60 years who have retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and the amount should not exceed the amount of retirement benefits.

Account holder

A depositor can operate more than one account in the individual capacity or jointly with the spouse (husband/wife). Nomination facility is available at the time of opening SCSS account and also after the opening of the account. A joint account can be opened with spouse only, and the first depositor in the Joint account is the investor. Opening PPF Account In Post Office: All You Need To Know

Account transfer

If you are an SCSS account holder, and you are changing your location, don't worry about the account. Senior Citizen Savings Scheme Account can be transferred from one post office to another post office. Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts.

Interest

Interest can be drawn through auto credit into savings account standing at the same post office, through PDCs or Money Order. In case of SCSS accounts, quarterly interest shall be payable on the 1st working day of April, July, October, and January. It will be applicable at all CBS Post Offices. Note that quarterly interest of SCSS accounts standing at CBS Post offices can be credited in any savings account standing at any other CBS post offices. What Are The Benefits Post Office Savings Account?

Maturity

The maturity period of Senior Citizen Savings Scheme account is 5 years. After maturity, the account can be extended for further three years within one year of the maturity. For this, the account holder has to apply in prescribed format. In such cases, the account can be closed at any time after the expiry of one year of extension without any deduction. Premature closure of SCSS account is allowed after one year on deduction of an amount equal to1.5% of the deposit and after 2 years 1% of the deposit.

Interest rate

From 1.04.2017, interest rates of SCSS accounts are 8.4​% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance and thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st 

Who are Senior Citizen's ??

The National Policy on Older Persons was announced by the Government of India in 1999. It was a step in pursuance of the UN General Assembly Resolution 47/5 to observe 1999 as the International Year of Older Persons and in keeping with the assurances to older persons contained in the Constitution. The well-being of senior citizens is mandated in the Constitution of India under Article 41.

According to the law, a "senior citizen" means any person being a citizen of India, who has attained the age of sixty years or above. A report released by the United Nations Population Fund and HelpAge India suggests that India had 90 million elderly persons in 2011, with the number expected to grow to 173 million by 2026. Of the 90 million seniors, 30 million are living alone, and 90 per cent work for livelihood.

The Union government wants its ministries and departments and private agencies to adopt 60 as the age at which a person is classified a senior citizen. This is to address anomalies in extending benefits to the elderly. The Social Justice and Empowerment Ministry is planning to bring in an amendment to the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, to implement this change.

The Act defines senior citizens as any person who is a citizen of India and has attained the age of “60 years and above.” The phrase  is being manipulated by several agencies to deny benefits under senior-citizen clauses by adopting different age limits, a government official said.

The UPA government had in 2013 raised the age for eligibility to senior citizen benefits to 65, a decision which had come under much criticism because it eliminated a chunk of the elderly from benefits. The government has had to face criticism also for not implementing its old age policy despite announcing it.