Budget 2023 Expectations: List of Senior Citizens Wishlist, From Medical Expenses To Tax Deductions
With the increasing cost of living, senior citizens are likely to believe that the current tax incentives are not adequate.
The Union Budget 2023 will be this government’s last full-year Budget before the 2024 general elections. Hence, taxpayers are hoping that the Finance Minister will announce some tax benefits while presenting the Budget on February 1, 2023.
Senior citizens constitute a substantial part of the tax-paying population in India as they also generate income (which is mostly passive in nature). However, considering the increasing cost of living, senior citizens may believe that the current income tax incentives are not adequate. Here are some of the expectations of the senior citizens from the upcoming Union Budget 2023.
Increase Income Tax Basic Exception For Senior Citizens
One of the key expectations from the Budget 2023 is that the basic income tax exemption threshold for senior citizens (individuals over 60 years of age) should be increased from the current limit of ₹3 Lakh, at par with that for very few senior citizens.
Increase The Limit Of Section 80C
Section 80C of the Income Tax Act allows a tax deduction of up to ₹1.5 Lakh for investments in various instruments like Public Provident Fund (PPF), National Savings Certificate, Senior Citizen Savings Scheme, 5-year term deposit, etc. This limit of ₹1.5 Lakh has not been revised in the last eight years. In the Budget 2023, senior citizens are now expecting to get an additional relief in addition to the current limit of ₹1.5 Lakh.
Higher Tax Deduction On Health Insurance Premium For Senior citizens
Medical expenses have shot up significantly. In wake of the rising inflation and high healthcare expenditure in old age, especially after the COVID-19 pandemic, senior citizens are expecting an increase in the threshold on tax deductions provided for health insurance premiums. Currently, senior citizens are provided with a deduction of ₹50,000 under Section 80D for any health insurance premium or medical expenditure incurred by then. It is expected that this limit be increased.
Increase The Limit For Medical Treatment Of Senior Residents Under Section 80DDB
Section 80DDB of the Income Tax Act allows a deduction to resident individuals for the amount spent on the medical treatment of specified diseases. For senior citizens, the limit for such deduction is ₹1 Lakh. However, considering the fact that the medical costs have spiraled over the years, senior citizens are expecting this limit to be increased further.
Increase Deduction Limit Under Section 80TTB
Section 80TTB allows senior citizens to claim a tax deduction of up to ₹50,000 on the interest income from bank deposits and post office savings accounts. However, this threshold has not been revised in the last 5 years. Hence, in the Union Budget 2023, senior citizens are expecting the government to increase the tax deduction limit under Section 80TTB as per the present rate of inflation.
Reduce The Age Limit For Senior Citizens Under Section 194P
Section 194P of the Income Tax Act exempts senior citizens aged 75 years and above from filing income tax returns subject to the following conditions:
The senior citizen should be of age 75 years or above.
The senior citizen should be a ‘Resident’ in the previous year.
The senior citizen only has pension income and interest income. The interest income is accrued/earned from the same specified bank in which he/she is receiving the pension.
It is expected that the Union Budget 2023 lowers the minimum age limit for senior citizens to avail the benefit.
Also Read: Union Budget 2023: The Four Primary Stages Of Budget Simplified