Budget 2026 expectations: Senior citizens look for tax relief, care policies, concessions

As Finance Minister Nirmala Sitharaman prepares to present the Union Budget for FY27 on February 1, expectations are rising across sections of society, particularly among senior citizens and retirees, who are seeking stronger financial security, clearer care frameworks and greater policy recognition as India’s demographic profile shifts.

Kerala has already set the tone by becoming the first state to present a dedicated ‘Elderly Budget’, signalling a structural rethink in how ageing is addressed in public finance. Alongside the main Budget, Finance Minister K N Balagopal tabled a separate Elderly Budget in the Assembly, anchored in the ideas of the Care Economy and the Silver Economy. For 2026–27, Kerala has earmarked ₹46,236.52 crore for senior citizens, nearly 19.1% of its total Budget outlay, adopting a rights-based, life-course approach to elderly welfare.

Retirement savings

Industry leaders say the upcoming Union Budget can play a decisive role in strengthening India’s senior care and retirement ecosystem. Rajit Mehta, MD and CEO of Antara Senior Care, said continued tax reforms supporting retirement savings are welcome, but called for broader interventions such as expanding insurance coverage to include long-term care through care homes and at-home services, strengthening reverse mortgage norms to allow up to 80% of property value, and granting infrastructure status to the senior care sector to improve access to affordable, long-term financing. Exempting senior care services from GST or taxing them on par with healthcare, he added, would significantly improve affordability and access.

Social protection umbrella

Civil society organisations have emphasised the need to widen the social protection net for elderly citizens, especially disadvantaged groups such as rural seniors and older women. HelpAge India has called for a mission-mode approach to long-term and palliative care, with dedicated funding and timelines, including coverage for home-based caregiving services under PM-JAY. The organisation has also urged the government to set a national minimum old-age pension of ₹3,000 per month for eligible seniors, indexed to inflation, to bring uniformity across states. Rising cybercrime against the elderly has emerged as another concern, prompting calls for a national cyber safety initiative focused on awareness and stronger safeguards in digital platforms.

Anupama Datta, Head – Policy, R&D, HelpAge India, said: “Older women face the greatest vulnerabilities – longer life expectancy, lower income security and higher caregiving burdens. They must be recognised as a priority group across ministries, with targeted support in health, care, livelihoods and digital literacy.”

Datta further said: “Section 80D in the old tax regime served an important purpose beyond tax relief – it encouraged families to invest in health insurance and preventive check ups for themselves and older parents. With rising NCDs, high health expenses and hospitalisation risks particularly among the elderly, we urge the government to restore 80D under the new regime or introduce an equivalent scheme to boost health insurance and strengthen preventive health behaviour.”

Tax deduction at source

Tax relief remains a key expectation ahead of Budget 2026. In Budget 2025, the government raised the threshold for tax deduction at source (TDS) on interest income for senior citizens to ₹1 lakh, though such income continues to be taxed at slab rates. Experts point out that the deduction under Section 80TTB remains capped at ₹50,000, creating a mismatch. CA Dr Suresh Surana said aligning the 80TTB deduction limit with the higher TDS threshold would reduce compliance burdens and provide meaningful relief. There are also suggestions to revisit Section 80TTA for non-senior taxpayers.

Senior Citizen Concessions

Beyond taxes and healthcare, everyday affordability issues remain in focus. One of the most prominent demands ahead of Budget 2026 is the restoration of railway ticket concessions for senior citizens, which were withdrawn during the Covid-19 pandemic and have not yet been reinstated, despite train operations returning to normal capacity.