The Union Budget 2018, presented on 1st February 2018 gave a plethora of benefits to the Senior Citizens!
The philosophy behind these benefits is evident from the statement of our FM, “ A life with dignity is a right of every individual in general, more so for the senior citizens. To care of those who cared for us is one of the highest honors. To further the objective of providing a dignified life, I propose to announce the following incentives for senior citizens.”
Tax2win takes this opportunity to compile the significant incentives that have been provided for the welfare of the senior citizens (persons having the age of 60 years or more ) including the pensioners in this budget. The various benefits provided in Budget 2018 are:
a. Introduction of Sec 80 TTB:
In this Budget, exemption of interest income on deposits with banks and post offices have been provided up to Rs. 50,000/- by the way of introduction of a new section 80 TTB.This section covers the interest income from fixed deposits and recurring deposit schemes as well. This shall bring a big relief for the senior citizens as most of them have their savings in the form of FD or any like schemes of banks.
If a senior citizen is taking benefit of section 80 TTB & 80TTA, then the cumulative benefit cannot exceed Rs.50,000.
b. Broadening the Scope & limit under Sec 80D:
Under section 80D (Deduction for payment of health insurance premium) the limit for senior citizen has been raised to Rs. 50,000 from Rs. 30,000.
Another hidden benefit that has come after the budget 2018 is that the senior citizen can even claim the medical expenses in addition to premium on health insurance and preventive health checkup.Earlier, under this section, only the individuals above 80 years (Super Senior Citizen) were eligible for the benefit of this section on the medical expenditure incurred, even without the payment of medical insurance premium. Now, this benefit has been extended to the individuals above 60 years i.e. Senior Citizen.
Therefore, we can conclude that now all senior citizens will be able to claim the benefit of this deduction up to Rs. 50,000/- per annum in respect of health insurance premium or any general medical expenditure incurred.
Moreover, another amendment that has been brought under this section, benefiting everyone (including an individual below the age of 60 years)is in respect of one-time payment of the premium of health insurance policies having the term of more than a year.Now, the deduction for the premium paid shall be allowed on a proportionate basis for the number of years for which health insurance cover is provided, the subject to the certain monetary limit specified under this section.
c. Increase in limit under section 80DDB:
Under section 80DDB (Expenses incurred for medical treatment on specified diseases), the deduction for the class of super senior citizen has been submerged into the senior citizen class.
There would be no distinction in the benefits to the senior and super senior citizens.In other words, the limit of deduction for medical expenditure in respect of certain critical illness has been raised from Rs.60,000(in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 100,000 or the amount incurred, whichever is lower for all the senior citizens.
d. No TDS on Interest Income :
As per the new provision, TDS u/s 194A (Deduction of TDS on interest other than interest on securities) shall not be deducted, if the interest does not exceed Rs. 50,000 in case of Senior Citizen. Earlier, this limit for the purpose of TDS deduction was Rs. 10,000.
e. Levy of Standard Deduction :
In place of the current exemptions namely, transport allowance and reimbursement of medical expenses a standard deduction of Rs.40,000/- have been reintroduced for all the salaried class in this budget.This decision shall benefit the pensioners also, who usually do not get any allowance on account of transport and medical expenses. According to the Finance Minister , the revenue cost of this provision to the govt. would be approximately Rs. 8,000 crores. However, the total number of salaried employees and pensioners who will get benefit from this decision is around 2.5 crores.
In addition to all the above tax concessions, Mr. Jaitley has extended the benefit of scheme Pradhan Mantri Vaya Vandana Yojana (PMVVY) in a twin mode.
PMVVY is a Pension Scheme precisely for the senior citizens which were available from 4th May, 2017 to 3rd May, 2018.This scheme provides an assured return of 8% p.a. payable monthly for 10 years.
Under Budget 2018, the tenure of this scheme has been extended up to March 2020 and also the investment limit has been doubled from Rs 7.5 lakh to Rs 15 lakh.
To conclude, we can say that by the way of budget 2018, the Finance Minister Arun Jaitley has relieved almost 4000 crore senior citizens from the taxation hassles to an extent. The bouquet of benefits presented by Mr. Jaitley to all senior citizens consists of benefits in Sec 80D, Sec 80DDB, Sec 80TTB, Sec 194A, Standard Deduction u/s Sec 16 and extension of PMVV Yojna .
It is surely a welcome move of Modi Govt. and a smiling budget for senior citizens !!