Good Times For Senior Citizens

Interest Income Benefit(Section 80TTB (of Income Tax Act, 1961))

• Interest exemption increased from Rs 10,000 to Rs 50,000. Benefit of existing Rs 10,000 is included in this new limit of Rs 50,000
• This increase in exemption provision has been introduced vide new section 80TTB (of Income Tax Act, 1961).
• So in case of senior citizens, what will apply will be section 80TTB (of Income Tax Act, 1961) but not section 80TTA (of Income Tax Act, 1961)(Rs 10,000 deduction).
• Consequently amendment has also been made in Section 194A (of Income Tax Act, 1961) increasing the threshold limit for deduction of TDS. Now Banks/Post Offices will deduct TDS of senior citizens only when interest to be paid will exceed Rs 50,000. 
• Another sight of relief for senior citizens will be that now less submissions of Form 15-H will be made by them. Banks paperwork regarding collection and then further intimation to income tax department will also reduce.
• The point of concern which remains is will this increased exemption be applicable for super senior citizens also? In memorandum also, expression used in "senior citizens" but not "senior citizens & super senior citizens”.

Health Insurance Premium Benefit(Section 80D (of Income Tax Act, 1961))

• Section 80D (of Income Tax Act, 1961) has been made more alluring by increasing the exemption limit and more and more individuals will be morphed for buying of medical insurance policy.
• Premium for health insurance policies including expenses for preventive health checkup paid upto Rs 50,000 will now get deduction under Section 80D (of Income Tax Act, 1961). Earlier this limit used to be Rs 30,000.
• In case medical insurance policy is for more than 1 year and one time premium is paid, then deduction will be proportionated over the tenure of medical insurance policy.
• So for individuals who were paying premium for their parents and parents age is 60 years or more, now they can avail deduction under Section 80D (of Income Tax Act, 1961) for Rs 50,000. For medical insurance of self/spouse/children, existing benefit of Rs 25000 is still available. So total benefit under Section 80D (of Income Tax Act, 1961) can now be upto Rs 25000+50000= 75000 if your parents age is 60 years or more….
• In case your age is also 60 years or more, then total benefit under Section 80D (of Income Tax Act, 1961) will be of whooping Rs 50,000+50,000= Rs 1,00,000..

Medical Treatment in case of Specified Diseases(Section 80DDB (of Income Tax Act, 1961))

• Existing deduction used to be Rs 60,000 for senior/80,000 for super senior citizens or expense incurred, whichever is less.
• Now deduction has been increased to Rs 100,000….So if expense incurred is say Rs 1,20,000 then maximum deduction in respect of senior citizens/super senior citizens will be Rs 100,000..
• It is pertinent to mention that in case some amount is reimbursed under medical insurance policy, then such amount reimbursed will be reduced from the deduction available under this section 80DDB (of Income Tax Act, 1961).

Pradhanmantri Vaya Vandana Yojana(PMVVY) Scheme

• Current investment limit has been doubled to Rs 15,00,000 from existing 7,50,000.
• The scheme was launched on 04.05.2017 to be in force only for ephemeral period upto 31.03.2018. But now the scheme has been extended till 31.03.2020.
• The main merit of the scheme is that it provides assured benefit of 8% return, which is higher than the existing rate on FD’s.
• On the flip side the biggest demerit is that, pension received will be fully taxable in the hands of senior citizen/super senior citizen in the year of receipt.
• To glean more information about the scheme, you can visit here.