Finance Minister Arun Jaitley, who presented the Union Budget today, provided a relief to senior citizens by giving significant incentives. He increased the exemption on interest income on deposits with banks and post offices from Rs. 10,000 to Rs. 50,000 and TDS shall not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
Limit of deduction for health insurance premium and/or medical expenditure for senior citizens has also been increased from Rs. 30,000 to Rs. 50,000, under section 80D. All senior citizens will now be able to claim benefit of deduction up to Rs. 50,000 per annum in respect of any health insurance premium and/or any general medical expenditure incurred.
Further, 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 has also been proposed.
These concessions are expected to give extra benefits of Rs. 4,000 to senior citizens.
Over and above that, Jaitley also proposed to extend the Pradhan Mantri Vaya Vandana Yojana 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 Rs. 7.5 lakh per senior citizen under this scheme is also being enhanced to Rs. 15 lakh.