Popcorn tax over senior care? Mohandas Pai slams GST burden ahead of Budget 2025

Mohandas Pai, former CFO of Infosys, has issued a strong call to action: India’s senior citizens need better financial and healthcare support, and Budget 2025 must deliver. With the country’s elderly population expected to surge from 13 crore today to 20 crore in the coming years, he argues that social security measures must evolve accordingly.

"We have to make sure, slowly, we build a social security system for the aged—especially in medical insurance. But the GST on insurance is still going on and on and on. It is terrible," Pai said in a video interview to the Hindustan Times. 

He criticized the government for debating the “popcorn tax” while failing to address tax relief on health insurance for seniors.

One of the biggest concerns for senior citizens is taxation. At present, those aged 60 and above get a basic income tax exemption of ₹3 lakh under both the old and new tax regimes. Experts, however, argue that this limit should be raised significantly.

Experts believe by increasing the basic exemption limit to ₹10 lakh, the government can eliminate the hassle of filing tax returns for senior citizens and boost their ease of living, adding that while tax relief is crucial for all middle-class taxpayers, it is especially critical for retirees who lack a steady income.

Healthcare costs have been spiraling post-pandemic, with medical inflation rising 12-15% annually. The financial strain is particularly harsh on senior citizens, whose health insurance premiums have increased sharply. Experts argue that the government must respond by increasing the tax deduction limits under Section 80D of the Income Tax Act.

Another demand is to reduce the tax burden by increasing the deduction limit for health insurance premiums to ₹50,000 for all and ₹1 lakh for senior citizens.

Additionally, under the old tax regime, senior citizens without insurance can currently claim a deduction of up to ₹50,000 for medical expenses. Experts are now pushing for a crucial change—allowing deductions for both health insurance premiums and out-of-pocket medical expenses. This move would ensure seniors have financial relief for routine medical costs like consultations and diagnostic tests, which aren’t covered by insurance.

Pai also pointed out that as urban populations grow and political power shifts with future delimitations, job creation and economic stability will be decisive issues in upcoming elections. “The next election in 2029 is going to be fought on jobs and urban areas,” he noted.