Exemption of Interest Income on deposits increased for senior citizens increased to Rs 50,000
New Delhi, Feb 1 (IBNS): In the Union Budget 2018, FM Arun Jaitley announced several incentives for senior citizens, including raising exemption limit for interest income on deposits.
On Thursday, the Finance Minister said that the exemption of interest income on deposits with banks and post offices to be increased 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.
The Finance Minister also announced raising the limit of deduction for health insurance premium and/ or medical expenditure 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.
The Finance Minister proposed 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.
These concessions will give extra tax benefit of Rs. 4,000 crores to senior citizens.
In addition to tax concessions, the Finance Minister 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.
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