With increasing expenses and limited income sources like savings or investments, the elderly population looks forward to much-needed tax concessions and administrative reforms.
As the Union Budget 2025 approaches, senior citizens eagerly await Finance Minister Nirmala Sitharaman's proposals, hoping for measures that address their financial and healthcare burdens. With increasing expenses and limited income sources like savings or investments, the elderly population looks forward to much-needed tax concessions and administrative reforms.
Currently, the basic income tax exemption for senior citizens is set at Rs 3 lakh, while super senior citizens enjoy an exemption limit of Rs 5 lakh. Under the new tax regime, income up to Rs 7 lakh is tax-free. Raising this limit to Rs 10 lakh could significantly benefit senior citizens, particularly those earning interest income between Rs 5-6 lakh from bank or post office deposits.
For individuals aged 75 and above, income solely from pension and interest from the same bank is exempt from filing income tax returns, as taxes are deducted by the bank itself. The government is considering lowering this age threshold to 70 years, potentially expanding this benefit to more senior citizens and reducing their administrative burden.
The government's push to promote the New Tax Regime may lead to increased basic exemption limits for senior citizens. This change would make the regime more attractive, especially given the limited deductions available compared to the old system.
Medical expenses remain a significant concern for senior citizens. Currently, Section 80D offers a Rs 50,000 deduction for health insurance premiums, preventive check-ups, and medical expenses. The government may introduce additional provisions in the Budget, allowing deductions for out-of-pocket medical expenses, further easing financial pressures.
Under Section 194A, taxes are withheld on interest income exceeding Rs 50,000 for senior citizens. To streamline processes and reduce the need for tax refunds, harmonizing the TDS threshold with the basic exemption limit is under consideration.
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