Budget 2018 income tax slab: From Pradhan Mantri Vaya Vandana Yojana to bank deposits, how senior citizens got big tax relief

New Delhi | Published: February 2, 2018 7:03:57 PM

Budget 2018: “To care for those who cared for us is one of the highest honours” is what Finance Minister Arun Jaitley said while he presented some of the measures to the senior citizens of India. In a last-ditch effort to woo the senior citizens and stressing on the need for the ‘Ease of Living’ for the common men in India before the next general elections

FM Arun Jaitley presented Union Budget on 1st February.Budget 2018: Presently, a deduction of Rs 10,000 in respect of interest on saving accounts is provided to all taxpayers. (IE)

Budget 2018: “To care for those who cared for us is one of the highest honours” is what Finance Minister Arun Jaitley said while he presented some of the measures to the senior citizens of India. In a last-ditch effort to woo the senior citizens and stressing on the need for the ‘Ease of Living’ for the common men in India before the next general elections, the Finance Bill 2018 has brought in the following tax relief for the senior citizens:

Presently, a deduction of Rs 10,000 in respect of interest on saving accounts is provided to all taxpayers. Vide Finance Bill, 2018, the said threshold would now be enhanced to Rs 50,000 specifically for senior citizens. Further, such benefit has now been extended to interest from all fixed and recurring deposit schemes.

Know how Arun Jaitley’s Budget 2018 will impact your tax liability with this Income Tax Calculator

In the wake of increasing expenditure towards medical insurance premium and medical check-up, FM Arun Jaitley has proposed to increase the monetary limit of deduction towards health insurance premium and preventive health medical check-up u/s 80D from the present Rs 30,000 to Rs 50,000.

Watch video: Tax takeaways from Budget 2018 for the common man

Further, amendments have been made under Section 80DDB pertaining to medical treatment of specified diseases. The erstwhile provisions provided for a deduction up to Rs 60,000 in case of senior citizens and Rs 80,000 for very senior citizens. Now, the above threshold has been increased to Rs 1,00,000 for all senior citizens.The above measures, we understand will give an extra tax benefit of Rs 4,000 crore to senior citizens.

Also read: Budget 2018 for senior citizens: It’s Acche din. Get a number of concessions from Modi government

In addition to the above tax measures, the Finance Bill, 2018, also extended the Pradhan Mantri Vaya Vandana Yojana by way of which an assured return of 8% is given by Life Insurance Corporation of India (‘LIC’), up-to March 2020. This scheme was initially launched on 4th May 2017 by FM Jaitley for a period of one year from the date of launch with the objective of providing social security during old age and protecting senior citizens against a future fall in their interest income due to volatile market conditions. The scheme enables old age income security for the elderly through a provision of assured pension/return linked to the subscription amount. The existing limit on investment of Rs 7.5 lakh per senior citizen under this scheme is also being enhanced to Rs 15 lakh.

Watch video:Brief History Of Budget: 10 Interesting Facts You Shouldn’t Miss

Having discussed the above, whether the Budget 2018 is populist or not will be a topic of debate and by one and all, but for the significant solace it has brought to the senior citizens of our country, it surely deserves a unanimous thumbs up!
(By Akhil Chandna, Director, Grant Thornton India LLP, with inputs from CA Girish Varandani)

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