Union Budget Expectations for Seniour Citizens - Feb 1st 2018

The annual Union Budget for 2018 is almost here and people are eager to see what it has in store for them, especially senior citizens. Considering the steady inflation which has afflicted the economy in the past, people are looking forward to tax reforms which will leave them with more disposable income. Here are some things which senior citizens are expecting from the upcoming Budget this year.

Enhance Scope of Section 80C

Currently, Section 80C of the Income Tax Act, 1961 provides up to Rs.1.5 lakh deduction on select investments like insurance, PPF, etc. However, dropping interest rates of these investments continue to have a negative impact on finances. Senior citizens are expecting some degree of relief from the upcoming budget and are hoping to see other investments such as low-risk hybrid mutual funds to be included under the deduction list of Section 80C.

Tax Exemption on Interest Earned From FDs

As per current regulations, all taxpayers, including senior citizens, can avail tax deduction of up to Rs.10,000 on interest amounts. However, the fall in interest rates of these conventional investments has affected the finances of many. Keeping this in mind, senior citizens are expecting that the Union Budget 2018 will offer tax exemption on interest income from bank FDs and make it at par with what is offered on savings accounts.

Lower Age Limit For ‘Very Senior Citizen’ to 70+ years

As time passes by, life expectancy in India has improved. Considering this, senior citizens are expecting that the age limit to qualify for the category of ‘Very senior citizen’ be lowered from 80 to 70+ years.

Increase Deduction Limit Under Section 80DDB

Section 80DDB regulates the tax deduction that is provided on medical treatment expenses incurred by senior citizens, for themselves or a dependent. Currently, senior citizens can avail tax deduction of up to Rs.60,000 or up to the actual cost of medical treatment, whichever is lower. Very senior citizens can avail deduction of up to Rs.80,000. Keeping in mind the ever-increasing cost of medical treatments, it is expected that these limits be revised.

Increase Deduction Limit for health insurance under Section 80D

Currently, senior citizens who have a health insurance policy and are paying premiums towards it, can avail tax deduction of up to Rs.30,000 under the provisions of Section 80D of the Income Tax Act, 1961. However, costs of medical care, treatments, and routine check-ups are skyrocketing every year, thus lowering the benefit which senior citizens can actually get out of this deduction. Keeping this in mind, people are expecting that the upcoming budget will enhance these limits.

TDS deduction on SCSS on interest income be increased above Rs.10,000

The SCSS or Senior Citizens Saving Scheme was started by the government for all individuals aged 60 and above. Currently, if the interest income from SCSS is over RS.10,000, then TDS (tax deducted at source) is cut. However, senior citizens are expecting the budget to bring about an increase in this limit, along with a change in the interest payment frequency from quarterly to monthly payment in order to offer greater liquidity.