How Has the Union Budget 2015-16 Been for Senior Citizens?
The Union Budget 2015-16, which was announced last week, made several proposals for promoting economic growth in the country. The thrust of the Budget remained on rural empowerment, infrastructure development, encouraging industrial growth and reducing regional disparity. However, along with this, another aspect which the budget focused on was providing benefits to senior citizens of the country.
Here are the proposals made by the Union Budget 2015-16 for senior citizens:
Hence, if you are a senior citizen, the Budget has left you with many reasons to smile. PersonalFN is of the view that senior citizens must take advantage of these announcements made by the Finance Minister. They can help you to reduce your tax outlays and thus leave you with a higher disposable income. PersonalFN believes that tax planning is an integral aspect of financial planning which must be handled prudently. Leaving the tax planning exercise for the last minute can cost you a fortune and can also harm your financial wellbeing.
- Increasing the deduction limit for premium paid in respect of health insurance
The premium paid for health insurance in case of senior citizens is eligible for deduction under Section 80D up to Rs 20,000 p.a. at present. While there were expectations that this be increased to 25,000 p.a. in case of senior citizens (and Rs 20,000 p.a. in case of non-senior citizens); the budget 2015-16 outlived these expectations. The deduction limit for senior citizens was raised to Rs 30,000 p.a. (while for non-senior citizens to Rs 25,000 p.a.).
- Deduction for expenditure incurred for medical treatment by very senior citizens
For very senior citizens (with age of 80 years or more) who are not covered by health insurance, the Union Budget 2015-16 proposed a deduction of Rs 30,000 p.a. towards expenditure incurred on their treatment.
- Raising the deduction for expenditure incurred on medical treatment of specified diseases
The amount incurred on medical treatment in relation to specified diseases of serious nature is allowed to be deducted from your Gross Total Income (GTI) up to a maximum of Rs 60,000 (for very senior citizens) currently under Section 80DDB. The Budget 2015-16 proposed to raise this deduction limit to Rs 80,000.
- Creation of a Senior Citizen Welfare Fund
The Union Budget 2015-16 also proposed the creation of a Senior Citizen Welfare Fund for subsidising the premiums paid by old age pensioners, BPL (Below Poverty Line) card-holders, small and marginal farmers and others. This fund would be created using the unclaimed deposits lying in the Public Provident Fund (PPF) and Employee Provident Fund (EPF) (about Rs 9,000 crores in total).
But here PersonalFN is of the view that subsidising in such a manner is inappropriate and can lead to troubles when legitimate PPF holders and / or EPF holders or their heirs claim the unclaimed balance in their account.
- Introduction of Pradhan Mantri Suraksha Bima Yojna
The Union Budget 2015-16 also proposed to shortly launch the Pradhan Mantri Suraksha Bima Yojna, which will provide a cover of Rs 2,00,000 for accidental death and full disability and a cover of Rs 1,00,000 for partial disability. The premium for this will be just Rs 12 per year. This Yojna will be made available to citizens who are from 18 years to 70 years of age and having a bank account.
- Service tax exemptions on Varishtha Bima Yojana
As a pleasant surprise, the Union Budget 2015-16 proposed that service tax exemptions be provided on the Varishtha Bima Yojana for the benefit of senior citizens.
- New scheme for providing physical aids and assisted living devices
As the number of senior citizens living in the country is quite high, the Finance Minister has decided to establish a scheme that will provide physical aids and assisted living devices to senior citizens who are below the poverty line (BPL).
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
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