Tax Benefits for Senior Citizens Proposed in the Finance Bill'18

The Hon'ble finance minister Shri Arun Jaitley presented the budget on 1st February' 2018. There were not much tax incentives for the taxpayers. Still, there were some proposals to benefit senior citizens.

1) Deductions available to senior citizens in respect of health insurance premium:

Section 80D provides a deduction to Individual and HUF in respect of payment towards medical insurance premium.

Budget Proposal: Existing limit Raised from Rs. 30,000 to Rs. 50,000.

Also, in case of single premium health insurance policies having a cover of more than one year, it is proposed that the deduction shall be allowed on the proportionate basis for the number of years for which health insurance coverage is provided, subject to the specified monetary limit.

2) Enhanced deduction to senior citizens for medical treatment of specified diseases:

Section 80DDB provides a deduction in respect of medical treatment of specified diseases.

Budget Proposal:

Existing Limit of Rs. 60,000 in case of senior citizen and Rs. 80,000 in case of very senior citizen raised to Rs. 1 Lakh for both senior citizen and very senior citizen.

3) Deduction in respect of interest income to senior citizen:

Section 80TTA provides a deduction of Rs. 10,000 in respect of interest income from the savings account.

Budget Proposal: New section 80TTB inserted so as to allow a deduction up to Rs 50,000/- in respect of interest income from deposits held by senior citizens.

Important Note: Deduction under section 80TTA shall not be allowed in these cases.

4) No TDS on Interest Income:

TDS is deducted on Interest other than 'Interest on securities' u/s 194A. Threshold limit is Rs. 10,000.  

Budget Proposal: It is proposed to amend section 194A so as to raise the threshold for deduction of tax at source on interest income for senior citizens from Rs 10,000/- to Rs 50,000/-.