TAX EXEMPTIONS / CONCESSIONS PROPOSALS TO SENIOR CITIZENS IN UNION BUDGET 2018-2019
Finance Minister has announced some significant concessions/exemptions to the senior citizens while presenting union budget for 2018-2019 on 1st February 2018.
(1) INTEREST INCOME FROM BANKS: Exemption of interest income on deposits with banks and post offices to be increased to Rs. 50,000 from Rs. 10,000 (on interest income previously allowed for savings accounts. (Section 194A)
(2) TDS EXEMPTION: TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit schemes. (Section 194A: For quick and efficient collection of taxes, the Income tax Law has incorporated system of deduction of tax at the point of generation of income. This system is called “Tax Deducted at Source” normally known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is directly remitted to the Government by the payer on behalf of the payee.) In other words, starting from 01.04.2018, no TDS will be deducted from interest income up to Rs. 50,000 by banks in case of senior citizens.
(3) HEALTH INSURANCE PREMIUM: Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000. (Section 80D)
(4) MEDICAL EXPENDITURE: 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. (Section 80DDB)
(5) STANDARD DEDUCTION: Standard deduction of Rs 40,000 on salary and pension.
(5) PRADHAN MANTRI VAYA VANDANA YOJANA: 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.
Please click and read the budget (2018-19) speech of Arun Jaitley, Minister of Finance, Government of India for more information.