Celebration time for Senior Citizens: Union Budget-2018

Celebration time for Senior Citizens: Union Budget-2018


Union Budget-2018

Celebration time for Senior Citizens: Union Budget-2018

Health Insurance of Rs. 5 Lakh to 10 Crores family is indeed one of the greatest health social welfare scheme of the Government. Another welcome move by the Government is a tax benefit propose to be conferre on Senior Citizens. Following are the special tax treatment for the Senior Citizens.

1.      Rs. 50,000/- deduction towards Interest (Including FDR Interest):

Presently, Rs. 10,000/- u/s 80TTA deduction is available to all the assessee towards interest on saving account with bank, societies & post offices. Further, Interest on Term Deposits/Bank FDR is not includible in deduction of Rs. 10,000/-. Now, senior citizens have been distinguished from other taxpayers. Senior citizens will be entitled for deduction of Rs. 50,000/- U/s 80TTB (including FDR Interest) as against other taxpayer who will be entitled for deduction Rs. 10,000/- (excluding FDR Interest) only.

2.      Rs. 50,000/- deduction towards Medical Insurance premium/ Preventive Health care u/s 80D:

Expense on medicine & regular check up is an integral part of life. It is directly proportional to increasing age. Realizing it, deduction towards Medical Insurance premium, preventive health check-up or medical expenditure for senior citizens u/s 80D has been increased from Rs 30,000/- to Rs 50,000/-. The distinction between senior citizen (60 years or more) & very senior citizen (80 years & more) has been done away.

3.      Rs. 1 Lakh deduction towards treatment of critical illnesses u/s 80DDB:

Presently, section 80DDB provides deduction towards medical treatment of specified critical ailment or disease which is Rs. 60,000/- for senior citizens & Rs 80,000 for very senior citizens. Specified illness for the purpose of section 80DDB includes Malignant Cancers, Neurological Diseases, Renal failure, Parkinson’s Disease, AIDS etc. Now, the amount is propose to be enhance to Rs. 1 Lakh for both, senior citizen as well as very senior citizens.
4.      No TDS if interest amount is below Rs 50,000 u/s 194A:
Presently, interest above Rs. 10,000/- attracts deduction of Tax at Source (TDS) and no special threshold exists for senior citizens. Now, a special threshold of Rs. 50,000/- is propose for senior citizens in current Budget 2018. As a result Interest would not be subject to TDS if interest amount doesn’t Rs. 50,000/-.
5.      Extension of benefit of LIC Scheme – LIC Pradhan Mantri Vaya Vandhana:
A Government backed pension scheme for senior citizens is offering 8% returns. This scheme is propose to be extend till March 2020 with investment limit enhancement from existing limit of Rs 7.50 Lakhs to Rs 15 Lakhs. It is indeed a good scheme for senior citizens in lower tax bracket.
6.      Pensioner can get Standard Deduction:
Standard deduction is propose to be reintroduce back in the Statute book. Salary taxpayers are complaining as they are not reasonably benefit due to withdrawal of deduction towards Transport (Rs. 19,200/-) & medical allowance (Rs. 15,000/-). However, it is a total win-win situation for the Pensioner as the regular pension is taxable under the head “Income from Salary” which will be eligible for straight deduction of Rs. 40,000/-.
With plethora of tax benefit, it’s a celebration time for the Senior citizens even though interest curve is moving downward constantly after demonetization era.
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