The Hon’ble finance minister Shri Arun Jaitley presented the budget on 1st February’ 2018.Budget 2018 proposes several tax benefits for the senior citizens
These include: increase in tax exemption limit for interest income from banks and post offices and increase in tax break on health insurance and medical expenditure under sections 80D and 80DDB. These would give much relief to senior citizen.
Below are the relif/benefit proposed to senior citizen in finance bill:-
- Exemption of interest income on deposits with banks and post offices to be increased from Rs 10,000 to Rs 50,000 and TDS (Tax Deducted at Source) will not be required to be deducted on such income, under section 194A.
- The government has raised the limit of deduction for health insurance premium or medical expenditure from Rs 30,000 to Rs 50,000 under Section 80D. All senior citizens will now be able to claim the Rs 50,000 per annum in respect of any health insurance premium or any general medical expenditure incurred.
- Section 80DDB pertaining to medical treatment of specified diseases. The provisions provided for a deduction up to Rs 60,000 in case of senior citizens and Rs 80,000 for very senior citizens. Now, the above threshold has been increased to Rs 1, 00,000 for all senior citizens.
- Proposed that the Pradhan MantriVayaVandanaYojana extend up-to March 2020. This scheme was initially launched on 4th May 2017 by FM Jaitley. The existing limit on investment of Rs 7.5 lakh per senior citizen under this scheme is also being enhanced to Rs 15 lakh.
- Proposed to allow a standard deduction of Rs 40,000/- in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses.
Let we understand by example:
Senior Citizen < 80 years
|Income under salary||7,65,800||7,60,000|
|Total Taxable Income||5,75,800||5,10,000|
|Rebate u/s 87A||-||-|
|Total Tax Payable After Rebate||25,160||12,000|
|Cess 3% / 4%||755||480|
|Total Tax Liability||25,915||12,480|
Senior Citizen > 80 years
|Income under salary||8,00,000||7,60,000|
|Total Taxable Income||6,10,000||5,10,000|
|Rebate u/s 87A|
|Total Tax Payable After Rebate||22,000||2,000|
|Cess 3% / 4%||660||80|
|Total Tax Liability||22,660||2,080|
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(This article is authored by Dhanajay Dubey exclusively for publication at StartUp Movers. No content of this article can be published elsewhere without prior permission of StartUp Movers. The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. It doesn’t constitute professional advice or a formal recommendation.)