Like the salaried taxpayers and the common man, senior citizens are also looking towards the Budget 2024 with much hope as high inflation and the rising cost of living amid limited income have made their life difficult. It may be noted that most senior citizens depend on fixed income investments or rental income to meet their regular income needs, and therefore require greater financial support and handholding than any other age group.
Income tax experts, however, say that the Union Budget 2024 is a Vote on Account and senior citizens should not anticipate any major announcements as a full-fledged budget will be presented upon the formation of the new government.
Still, like always, senior citizens have many expectations from the government and FM Nirmala Sitharaman. Here we take a look at some of them:
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“Under the old tax regime, individuals of 60 years or older (i.e., senior citizens) are exempt from tax for income up to Rs 3,00,000, whereas the enhanced basic exemption limit for individuals of 80 years of age or older (i.e., super-senior citizens) is Rs 5,00,000. Since the aforementioned limits has not been increased since a long time, it should be modified in tune with inflation and the cost of living,” says Dr. Suresh Surana, Founder, RSM India.
Further, considering the healthcare needs of senior citizens as well as recognizing the rising healthcare costs for the elderly, the deduction limit u/s 80D of the I-T Act, which is available under the old tax regime, should be enhanced from the existing Rs 50,000 to Rs 75,000.
Also Read: Budget 2024: Will Standard Deduction limit be increased in this year’s interim budget?
“Senior citizens are also hoping for an increase in the tax exemption limits under the old and the new tax regime, tax-free pensions from NPS, EPS, etc. Increase in the deduction amount u/s 80TTB from the current Rs 50,000 for interest from savings bank account and fixed deposits is also on their wishlist,” says Akhil Chandna, Partner, Grant Thornton Bharat.
Rationalisation of Section 194P wherein age limit for senior citizens to be exempt from filing income tax return over 75 years should be extended to all senior citizens.
Santosh Joseph, Founder and CEO, Germinate Investor Services, says that the present budget is going to be a vote on account budget, which means that since we are getting into the general assembly elections, this budget will be presented which will further be ratified by the new government which will be formed post the elections. Therefore, there will not be any big-bang announcements or reforms because if the government is going to be different, then these things will not get passed. Therefore, it usually will be very quiet or a muted budget to begin with.
However, as far as senior citizens are concerned, every year senior citizens look out for the budget for a couple of things:
1. Are there any new benefits/schemes by the Central government to reduce their taxes? “Considering most senior citizens do not have an active source of income, they would like their income to be tax-efficient or, if possible, to a great extent tax-free. In the past, the government has been very cognizant of this and that is why you have a senior citizen’s saving scheme, but what they really like is as much as possible a tax-free income,” informs Joseph.
2. Senior citizens would also like schemes that give them stability, income and some bit of growth in their investment which are also safe and guaranteed. We have a large population in India, which are senior citizens and are largely dependent on government schemes to park their retirement corpus in. Therefore, a Central government-backed scheme is a great choice and option for them to park their money.
3. A lot of senior citizens also look forward to relaxation in tax filing, relaxation in some of the fees and timelines applicable to general people. Already, if you are above 60, you get a discount in air fare and railway. So, they look at small benefits like these that can help them make things a lot more affordable. It could be travel, food, some of the deadlines and timelines they have.
So, “senior citizens are looking forward to things that make them comfortable especially in a fast-paced world we live in today — may be an extension of a deadline, or different timeline or different provisions for them from the income tax deduction, filing or even rebates,” says Joseph.
Whatever be the case, the aforementioned announcements, if introduced by the government, would provide senior citizens with more disposable income amidst rising inflation.