Earnings up to Rs 5 lakh can be tax-free, insurance premiums can also be increased.
Senior Citizen: Up to Rs 5 lakh can be earned Tax-free, insurance premium can also be increased relief
Finance Minister Nirmala Sitharaman may offer several concessions to the elderly in the budget this time. For one, the income tax exemption limit for them may be increased. Second, there is talk of increasing the tax relief on its premiums in view of the need for insurance due to the Corona epidemic. This change will take place in the old tax system.
Earnings up to Rs 5 lakh can be tax-free
At present, the elderly do not have to pay tax on income up to Rs 3 lakh a year. This limit was fixed 6 years ago in 2014. Given rising inflation, it could be increased to Rs 5 lakh. Thus, the limit for senior citizens above 80 years of age is already Rs 5 lakh.
The deduction limit may increase on the insurance premium
Under Section 80D of the Income Tax Act, health insurance premiums up to Rs 50,000 paid by senior citizens are exempted. It could be increased to 1 lakh considering the health related needs after the Koro epidemic.
Deduction on interest earnings
Under the Senior Citizen Section 80 TTB, a rebate of up to Rs 50,000 per annum can be claimed on interest earned on a savings bank account and a fixed deposit. It can be increased from 50 thousand to 1 lakh.
Tax may be levied on the interest of the Senior Citizen Savings Scheme
Interest received in Post Office Senior Citizen Savings Scheme (SCSS) can be tax free. At present, it has to pay tax on its interest just like a fixed deposit. The scheme is currently earning 7.4% annual interest.
The tax exemption limit on treatment costs may be increased
Currently, under Section 80DDB, a senior citizen taxpayer can claim a deduction of up to Rs 1 lakh for expenses incurred on treatment of certain diseases. But illnesses like corona have increased the cost of treatment. This may increase the tax exemption under section 80DDB.
This time the budget copy will not be printed. Budget documents will be made available digitally. The government has also developed a new mobile app for budget.
The salaried people and the middle class have high hopes for the finance minister. The salaried class wants the finance minister to make a big announcement about income tax relief. This is to increase the basic exemption of Rs 2.5 lakh in income tax to Rs 3 lakh
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