Union Minister for Finance and Corporate Affairs Arun Jaitley on Thursday announced significant incentives for senior citizens with the objective to provide a dignified life to them.
Presenting the General Budget 2018-19, his last full budget before general elections, in the Lok Sabha, the Finance Minister said the exemption of interest income on deposits with banks and post offices will be increased from Rs 10,000 to Rs 50,000 and Tax Deduction at Source will not be required to be deducted on such income, under section 194A.
This benefit will be available also for interest from all fixed deposits schemes and recurring deposit schemes, he said.
The Finance Minister also announced raising the limit of deduction for health insurance premium and medical expenditure from Rs 30,000 to Rs 50,000, under section 80D.
All senior citizens will now be able to claim benefit of deduction up to Rs 50,000 per annum in respect of any health insurance premium or any general medical expenditure incurred, the Minister stated.
The Finance Minister proposed raising the limit of deduction for medical expenditure in respect of 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 in respect of all senior citizens, under section 80DDB.
These concessions will give extra tax benefit of Rs 4,000 crore to senior citizens, he said.
In addition to tax concessions, the Finance Minister proposed to extend the Pradhan Mantri Vaya Vandana Yojana up to March 2020 under which an assured return of 8 per cent is given by Life Insurance Corporation of India. The existing limit on investment of Rs 7.5 lakh per senior citizen under this scheme was also being enhanced to Rs 15 lakh, he proposed.