Budget 2022 expectations for senior citizens: SBI Research has suggested the Government should promote savings by increasing the tax exemption for senior citizens under Section 80TTB to Rs 1 lakh. Currently, under this section, senior citizens enjoy tax exemption on interest income up to Rs 50,000 from various savings accounts, including Senior Citizens Savings Scheme (SCSS), bank fixed deposits and recurring deposits.
In its latest “Ecowrap” report, SBI Research said: “Under 80TTB interest income from deposits by senior citizen (Savings bank accounts, fixed deposits, recurring deposit accounts) up to Rs 50,000 is exempted from income tax. This threshold may be increased to Rs 1,00,000, which will have fiscal cost of only Rs 2000 crore (around 7 bps FD).”
Earlier, the Institute of Chartered Accountants of India (ICAI) had recommended the Government to include income by way of interest from National Savings Certificate within the ambit of section 80TTB.
Medical Savings Account
SBI Research also recommended the Government to provide to Medical Savings Account wherein a part of the advance tax could go to Mediclaim policy. Or, a scheme to deduct interest from the savings account and pay towards mediclaim may also be thought of, it said.
“Medical Savings account wherein a part of the advance tax goes to Mediclaim policy – thus enabling customers to take advantage of EMIS. A scheme to deduct Interest from Savings Account and pay towards Mediclaim policy can be thought of,” SBI Research recommended.
“The total no of savings bank accounts in India is 130 crore (excluding the Jan Dhan accounts who are possibly covered in Ayushman Bharat). If we take the average balance in such amount (Rs 1215) as the insurance amount, the account holder can get up to Rs 50,000 as annual insurance cover that can be even tweaked to include medical expenses,” it added.
No GST on health insurance
The Ecowrap report also recommended the Government to consider exempting health insurance products from GST, at least for all retail and health-focused products. “At a time when Governments are grappling with pandemic scenarios, they can look at making Health insurance more affordable,” it said.