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Union Budget 2018: Hike in Section 80D limit to Rs 50,000, exemption on deposits for senior citizens

From the exemption of interest income to raising the limit of deduction for health insurance, the government seems to be focusing on the welfare of the elderly.

twitter-logo BusinessToday.in   New Delhi     Last Updated: February 1, 2018  | 19:16 IST
Union Budget 2018: Hike in Section 80D limit to Rs 50,000, exemption on deposits for senior citizens

The Union Budget 2018, presented before Parliament by Finance Minister Arun Jaitley on Thursday, seems to have consolidated the gains from structural initiatives taken up by the government during the course of four years of its rule to focus on strengthening the rural economy, including agriculture and healthcare for economically less privileged, and taking care of senior citizens.

From the exemption of interest income to raising the limit of deduction for health insurance, the government seems to be focusing on the welfare of the elderly. The Union Budget 2018 document says through overall concessions for the senior citizens, around Rs 4,000 crore extra tax benefit would be given for them.

On senior citizens, FM Jaitley said: "A life with dignity is a right of every individual, more so for the senior citizens. To care of those who cared for us is one of the highest honours." Providing a big relief to the elderly, the FM said they would get exemption up to Rs 50,000 of interest income on bank and post office deposits; the latest provision also applies to FDs (Fixed Deposits) and RDs (Recurring Deposits).

 

INCENTIVES FOR SENIOR CITIZENS

  1. Exemption of interest income on deposits with banks and post offices to be increased from Rs 10,000 to Rs 50,000 and TDS (Tax Deducted at Source) will not be required to be deducted on such income, under section 194A.
  2. The benefit of exemption will also be available for interest from all fixed deposits schemes and recurring deposit schemes.
  3. The government has raised the limit of deduction for health insurance premium or medical expenditure from Rs 30,000 to Rs 50,000 under Section 80D. All senior citizens will now be able to claim the Rs 50,000 per annum in respect of any health insurance premium or any general medical expenditure incurred.
  4. FM Jaitley announced 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.
  5. These concessions will give extra tax benefit of Rs 4,000 crore to senior citizens. In addition to tax concessions, the government has 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 (LIC). The existing limit on investment of Rs 7.5 lakh per senior citizen under this scheme is also being enhanced to Rs 15 lakh.

 

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