Senior Citizens Get Triple Break

The finance minister proposed to extend the Pradhan Mantri Vaya Vandana Yojana till March 2020 under which an assured return of 8% is given by the Life Insurance Corporation of India. The existing limit on investment of Rs 7.5 lakh was doubled to Rs 15 lakh. At a time when fixed deposit returns are around 7%, this will help senior citizens get higher interest rates.

Opening a bag of goodies, the finance minister raised the exemption limit on income from interest by five times to Rs 50,000 per year. No TDS will be deducted from the interest income of senior citizens. Arun Jaitley also increased the limit of deduction for health insurance premium and medical expenditure to Rs 50,000 from Rs 30,000 under Section 80D. This additional deduction of Rs 20,000 will help a taxpayer save up to Rs 6,000 per annum.

The FM raised the limit of deduction for medical expenditure in respect of certain critical illnesses to Rs 1 lakh for all senior citizens, under Section 80DDB. Earlier, this limit stood at Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens. The concessions will cost the government Rs 4,000 crore.

The assessee will need to furnish a medical prescription to avail of these benefits. The tax benefits can also be claimed by those who incur expenditure for buying health insurance policies, or spend on medical treatment of dependent senior citizens.