Budget 2020 Expectations: Senior citizens of the country have pinned their hopes on this year's budget, particularly in view of the rising prices and falling interest rates.
Budget 2020 Expectations for Senior Citizens: The final countdown to FM Sitharaman’s second budget has begun, and with this various sections of society — including the salaried class and the common man — have set their sight on it. Along with them, senior citizens of the country have also pinned their hopes on this year’s budget, particularly in view of the rising prices and falling interest rates. The Modi government had in the Union Budget 2018 announced enhanced exemption for senior citizens on various counts, apart from giving some other reliefs. Keeping that in view, here’s what senior citizens expect from this year’s budget:
1. Enhance basic exemption limit for senior citizens
Basic exemption limit for resident senior citizen (i.e. aged 60 years or more but less than 80 years) is Rs 3,00,000, which was last increased in 2014. Further, this is only Rs 50,000 higher than a non-senior citizen taxpayer. “With a growing number of senior citizens dependent on pension and other income accruing from their independent savings, such basic exemption limit may be enhanced to Rs 5 lakh to meet financial and personal requirements for such senior citizens. Consequently, the basic exemption limit for resident super senior citizens (i.e. aged 80 years or more) may also be enhanced upwards from the existing Rs 5 lakh to Rs 7.5 lakh. Other income slabs and tax rates may also be adjusted basis such revised limits,” says Parizad Sirwalla, Partner and Head, Global Mobility Services-Tax, KPMG in India.
2. Lower age limit to qualify for ‘Super Senior Citizen’
Given technological advancements in medical sciences, life expectancy in India has improved over the years. Considering this, the FM can consider that the age limit to qualify for the category of ‘super senior citizen’ be lowered from the existing 80 years or more to 70+ years for the purpose of availing beneficial basic exemption limit applicable to such category.
3. Raise deduction limit under 80TTB
Separate deduction under section 80TTB of the Income-Tax Act, 1961 up to Rs 50,000 per annum was introduced for resident senior citizens effective FY 2018-19 in respect of interest on specified deposits (e.g. bank deposits, post office deposits etc.). Considering that such interest income may form primary source of income for this age group, this limit may be considered to be reasonably enhanced to Rs 1,00,000.
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4. Enhance deduction for medical expenditure
Currently a resident senior citizen, who is not covered under any mediclaim insurance scheme, can claim a deduction up to Rs 50,000 for medical expenditure incurred on own or family’s health during a particular FY under section 80D of the Income-Tax Act, 1961. To provide relief from ever increasing cost of medical treatment, such deduction may be enhanced to Rs 1,00,000.
5. Exempt income from SCSS
The Senior Citizen Savings Scheme (SCSS) is an avenue of investment which yields more than 8 per cent return (8.6 per cent for Q4 of FY 19-20) for senior citizens. “As the interest earned on deposits under SCSS is taxable, the post-tax return on such deposits is comparatively lower. Hence, the government may evaluate to exempt this income from SCSS and thereby giving additional disposable income to the senior citizens,” says Sirwalla.
Thus, even if some of these expectations are met, that will give a huge relief to senior citizens and also put more money in their hands.