Budget 2019: Tax benefits for senior citizens

Tax Benefits & Exemptions for Senior Citizens in Budget 2019: The expectations by the senior citizens from the Union Budget 2019 is no less this time especially when the interest rates are falling and medical inflation is on a high.

Budget 2019-20, budget 2019 for home buyers, budget 2019 for booked properties, RERA, India union budget, india union budget 2019, india union budget facts, union budget date, budget of india, union budget 2019-20, facts about india union budget, india union budget interesting facts, finance minister, nirmala sitharaman
Budget 2019-20: In its budget recommendation to the finance minister, Forum For People's Collective Efforts (FPCE), earlier knows as Fight for RERA, also demanded that home buyers should be categorised as primary secured creditors.

Income Tax Rebate for Senior Citizens AY 2019-20: In almost every Union Budget, there are incentives, exemptions and tax benefits for senior citizens. The expectations by senior citizens from the Union Budget 2019 are no less this time, especially when the interest rates are falling and medical inflation is on a high.

Under section 80D, the premium paid towards health insurance policies from general insurance companies, standalone health insurance companies or even for riders of a life insurance companies qualifies for deduction up to Rs 25,000 for self and family members. The policy may be an individual health insurance plan, a Family Floater or a Critical Illness plan.

Watch FE Explained video: What is Union Budget?

The limit of Rs 25,000 is for individuals who are below 60 years of age. For those who are senior citizens i.e. 60 years or more in age, the maximum limit stands at Rs 50,000. “Adhering to the inflating prices in the medical sector, the prevailing limit of Rs. 50,000 under section 80D should be revised to Rs. 75,000 on medical insurance premiums for senior citizens. The consideration may allow more people to participate in preventive health check-ups,” says Heena Arora, Marketing & Finance Head, All India ITR.

ALSO READ | Union Budget 2019 LIVE: FM Nirmala Sitharaman meets President; Sensex breaches 40,000 mark

Within the limits of Rs 25,000 or Rs 50,000 as per one’s age, there is a sub-limit of Rs 5,000 that also gets tax benefit, if the amount is spent on preventive health check-up. For example, if one pays a premium of Rs 20,000 and he also spends Rs 5,000 for a preventive health check-up, the total deductible amount will become Rs 25,000 and qualify for section 80D tax benefit.

Considering the benefit of preventive health check-up and the rising medical costs, this limit needs to be enhanced especially for the senior citizens as the preventive health check-up packages for them is expensive than it is for others.

With the interest rates falling and the banks lowering the fixed deposit rates, the senior citizens find it difficult to park funds in regular and assured income investments that carry less risk. Bank FDs are a favourite amongst senior citizens and with several debt funds showing the risk involved in recent times, the avenues for them remain limited.

Budget 2018 had introduced a new section 80 TTB that allows senior citizens to claim deduction up to Rs 50,000 from their total income in respect to the interest income earned by them. This helped them reduce their tax liability. The interest income earned is, however, restricted to deposits made in a bank or post office deposits including recurring deposits and savings account. The post office has Time Deposits for 1,2,3 and 5 years of tenure. The Institute of Chartered Accountant of India in its Pre-Budget memorandum 2019 has suggested, “In order to extend the benefit of provisions of section 80TTB to senior citizens, it is recommended that interest income arising to Senior Citizens on National savings Certificate may also be included within the ambit of section 80TTB”.

A distinction needs to be made with Section 80TTA which allows interest earned up to Rs 10,000 in a year only from bank savings account to the taxpayer. Senior citizens can only make use of section 80TTB.

It remains to be seen, what Budget 2019-20 has in store for the senior citizens and what the tax exemption for senior citizen will be.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express Telegram Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.