Tax Benefits to Senior Citizen under Budget 2018

Finance Minister Arun Jaitley delivered his budget speech for the year 2018-19 before the Parliament today. The budget is largely focused on boosting the agriculture sector, healthcare sector along with education sector.

Arun Jaitley proposed several tax benefits to senior citizens which would reduce the tax burden on them. Firstly, the Minister raised the tax exemption rate on interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.

This is highly beneficial to the senior citizen who derives income mostly from Fixed Deposits and post office schemes. The Finance Minister also focused on increasing the tax break on health insurance and medical expenditure under sections 80D and 80DDB.

Following are the relief proposed to senior citizens:

• Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
• TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit schemes.
• Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D.
• Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lakh for all senior citizens, under section 80DDB.
• Proposed to extend Pradhan Mantri Vaya Vandana Yojana up to March, 2020.Current investment limit proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.