Know your budget: Tax relief for senior citizens and salaried taxpayers
New Delhi, February 01: The Union Budget announced for the year 2018-19 will not benefit the common man or the middle class much, although, senior citizens and salaried tax payers were bestowed with some tax reliefs.
A standard deduction of Rs 40,000 was introduced in lieu of transport and medical reimbursements for salaried employees and for senior citizens, saving incentives and healthcare tax breaks were proposed.
Relief to senior citizen
To further the objective of providing a dignified life to the senior citizens, the Finance Minister proposed the following incentives:
Tax exemption limit for interest income from banks and post offices from Rs 10,000 to Rs 50,000 was increased for the senior citizens. They were also exempted of interest income on deposits with banks and post offices to be increased from `10,000/- to `50,000. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
The limit of deduction for health insurance premium and medical expenditure from 30,000/ to 50,000/ was raised. All senior citizens will be able to claim benefit of deduction up to 50,000 per annum in respect of any health insurance premium and/or any general medical expenditure incurred. Apart from these, a benefit of 4,000 crores were allotted for the senior citizens.
The Pradhan Mantri Vaya Vandana Yojana was extended up to March, 2020 under which an assured return of 8% is given by Life Insurance Corporation of India. The existing limit on investment of 7.5 lakh per senior citizen under this scheme was enhanced to 15 lakh.
Relief to salaried taxpayers
The Minister said that the Government had made many positive changes in the personal income-tax rate applicable to individuals in the previous years. Therefore, the structure of the income tax rates for individuals was not altered.
Since the major portion of personal income-tax collection came from the salaried class, a standard deduction of 40,000 in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses was proposed.
The minister said that 1.89 crore salaried individuals have filed their returns and have paid total tax of 1.44 lakh crores in the previous year.
The transport allowance at enhanced rate will continue to be available to differently- abled persons. Also other medical reimbursement benefits in case of hospitalization etc., for all employees will continue.