Senior citizens will get a deduction up to Rs 50,000 in respect of interest earned from deposits held with banks, co-operative society and post office.
Finance Minister Arun Jaitley introduced many key changes in the last budget that he presented. The latest tax related changes will come into effect from April 1 this year. The changes in the income tax rules range from LTCG on equities to standard deduction for the salaried employees. Other than that there are some changes for senior citizens as well. Most of these changes will come into effect from April 1 this fiscal year. Here are the 3 income tax changes which will come into effect from April 1, 2018:
1)Interest earned by senior citizens
Senior citizens will get a deduction up to Rs 50,000 in respect of interest earned from deposits held with banks, co-operative society and post office. At present, deduction up to Rs 10,000 is allowed for all individuals from interest earned from deposit accounts – not time deposits – which are held with any bank, co-operative society and post office. Under section 80TTA no separate deduction will be available for interest income earned from savings account for the senior citizens.
For any amount spent on the medical treatment of specified diseases (i.e. malignant cancers, AIDS, etc), there is a deduction available to resident individuals and HUF (Hindu Undivided Family) under the existing provisions. The deduction limit at present stands at Rs 60,000 for expenses relating to senior citizens and Rs 80,000 with respect to very senior citizens. In this budget Finance Minister has increased the above mentioned limit to Rs 100,000 uniformly for the two categories.
At present, a maximum deduction of Rs 30,000 is permissible for an individual or HUF to make payment towards health insurance premium that includes Rs 5,000 towards preventive health check-up for resident senior citizens. In this budget, Finance Minister has announced maximum deduction up to Rs Rs 50,000. Deduction for medical expenditure can also be claimed by the senior citizens for medical expenditure.